As times change, counterfeit goods sold in rural areas have also evolved. Rural e-commerce consumption has gradually become a new market that major e-commerce giants are competing for. Rural residents' shopping channels have expanded from offline acquaintance shops to a mix of online and offline shopping methods. However, counterfeit and shoddy products in rural areas have not disappeared with the change in consumption patterns. With the development of the times, the focus of rural counterfeit goods has shifted from 'fake seeds' to 'fake bags'. Convenient internet platforms have given rise to 'home factories' and 'rental house factories'. An investigation by Nandu reporters found that driven by profit, illegal gangs take risks, even forming hidden production and sales chains for counterfeit goods. On the other hand, due to limited purchasing power, some rural consumers view knockoff products as 'substitute consumption'; some merchants also disregard rules, taking chances to skirt the law. This makes counterfeit production and sales a gray area that receives mutual acceptance. From 'Fake Seeds' to 'Fake Bags': The Evolution of Rural Counterfeits Mai Jie, Kang Shuai Fu, Jin You Yu, Ba Ge He Tao... These various 'high imitations' often become topics of ridicule about rural counterfeit goods. In fact, with the development of the times, counterfeit goods sold in rural areas have also undergone changes. More than 10 years ago, rural counterfeits were mostly concentrated in bulk agricultural products, such as fake seeds, fake fertilizers, and fake pesticides; now they have gradually expanded to multiple fields including tobacco, alcohol, daily chemicals, home appliances, and clothing. Moreover, rural residents' shopping channels have expanded from familiar shops on street corners to large chain supermarkets and internet e-commerce platforms, and some even try cross-border consumption. According to the '2017 Rural E-commerce Development Report' released by the China E-commerce Research Center, in 2017, rural areas achieved online retail sales of 1,244.88 billion yuan, a year-on-year increase of 39.1%; among physical products, the top three online retail sales were clothing, shoes, and bags; home furnishings and decorations; and food and health products. The huge potential of rural e-commerce consumption has gradually become a new market that major e-commerce giants are competing for. However, counterfeit and shoddy products in rural areas have not disappeared with the change in consumption patterns. E-commerce has cross-regional and cross-population attributes, and whether in urban or rural areas, consumers face the same risk of buying fakes. Rural areas have inconvenient transportation, relatively closed information, limited supervision, and lower average purchasing power among rural residents, making them a hard-hit area for low-quality and inferior products. Moreover, compared with the more mature e-commerce consumption habits in cities, for rural consumers who value acquaintance relationships more, O2O offline stores may continue for a considerable period. The problem of counterfeit goods in rural offline stores is also not optimistic. In January 2018, a media outlet released a consumer evaluation report for Meishan City, Sichuan Province. The report showed that 66.67% of users in Meishan had bought counterfeit goods in township offline supermarkets. Among them, daily chemical counterfeits accounted for 70.83%, food 58.33%, and clothing 37.5%. A One-Stop Production and Sales Chain for Fake Cigarettes Main Offender Sentenced to 15 Years in Prison Due to high transportation costs, some rural shops in remote areas generally rely on traditional channels such as county wholesale markets and large discount supermarkets, choosing to purchase nearby, and rarely directly connect with manufacturers. This gives counterfeiters an opportunity, and counterfeit chaos such as passing off fakes as genuine, inferior goods as quality goods, and selling under licensed brands is common. Among them, there are merchants who 'unintentionally' sell fakes due to lack of discernment, and there are also those who organize a one-stop production, transportation, and sales 'counterfeit industry chain' for profit. In the cross-provincial fake cigarette sales case cracked by police in Xunyang County, Shaanxi in 2014, low-quality cigarettes counterfeiting high-end brands were transported from Guangzhou to Xi'an for sale, involving an amount exceeding 2 million yuan. The suspect Zhang Mouyi confessed that the purchase price of these mid-to-low-end fake cigarettes was only 5-20 yuan, and they were generally purchased and sold in whole pieces (50 cartons), with a profit of 500-800 yuan per piece. According to him, generally, buying a genuine cigarette for four or five yuan, opening the packaging, and replacing the tobacco can make a high-end cigarette worth 20-30 yuan or more. The suspects disguised the fake cigarettes as ceramics, electrical appliances, tea, and other items, transported them to Xi'an via logistics companies, then had local freight drivers pick them up, and finally resold them to the most terminal street-level tobacco and alcohol shops. Driven by profit, whether it was the upstream fake cigarette manufacturers, freight drivers, or downstream distributors and tobacco shops, they all turned a blind eye to the production and sale of fakes and actively participated. After trial, the court held that the six defendants, with the aim of illegal profit, knowingly sold and transported large quantities of counterfeit and shoddy cigarettes over a long period, and their actions constituted the crime of selling fake and shoddy products. In the end, the six suspects were sentenced to fixed-term imprisonment and fined, with the main offender Zhang Mouyi receiving the heaviest penalty: 15 years in prison and a fine of 1.18 million yuan. 'Rental House Factories' Produce Fakes Social Networks Attract Customers In recent years, selling fakes through internet channels such as QQ, WeChat, and e-commerce platforms has gradually emerged. On the one hand, the internet enables cross-regional sales, invisibly facilitating large-scale fake sales; on the other hand, because it eliminates transportation and face-to-face transactions, the production and sales chain is more hidden. Zhang, a post-90s resident of Tianjin, started selling fake cigarettes on WeChat in September 2015. He did not have a tobacco monopoly wholesale and retail license and knew the cigarettes were not genuine. However, he continued to post photos of counterfeit cigarettes on his WeChat Moments, along with a price list significantly lower than market prices, and shipped them to other places via express delivery. Buyers could send the product name and quantity via WeChat, then choose payment methods such as transfer or cash on delivery. Famous brand cigarettes with a market price of 500-600 yuan were priced by Zhang at only over 100 yuan. After the case was exposed, a buyer said, 'I knew the cigarettes were cheap and couldn't be genuine, and I didn't ask whether the seller had a tobacco monopoly license.' In March 2018, the Hequ County People's Court in Shanxi Province sentenced Zhang for illegal business operation to six months in prison and a fine of 6,000 yuan. The convenient and low-threshold internet channels have also given rise to 'home factories' and 'rental house factories' in rural areas. In addition, counterfeit goods sent to rural areas also include fake health products and even fake medicines, which pose certain safety hazards. In February 2015, Zhang and Wang from a natural village in Yima City, Henan Province, hired multiple workers in a rented house to illegally produce and sell sexual health foods containing toxic and harmful substances. They specially purchased packaging machines, capsule machines, vacuum cleaners, and other equipment as well as necessary raw materials, with dedicated personnel responsible for promotion, production, and shipping, with a clear division of labor. Wang confessed that they undertook business through QQ and shipped via express delivery. In just 10 months, the gang produced and sold hundreds of thousands of toxic and harmful food items, illegally profiting 56,684 yuan. At the production site, local police also seized pills containing sildenafil and a large amount of production raw materials. Knockoffs Involve Brand Infringement Yet Receive 'Tolerance' from Merchants and Consumers In the counterfeit market, 'knockoffs' that counterfeit well-known brands and sell inferior products are the most common. For example, the ridiculous 'Jin You Yu' blended oil, 'Zhou Zhu Pai' washing powder, and 'Ba Ge He Tao'. Knockoff products are highly similar in appearance or design to genuine products, making it difficult for consumers to distinguish. Moreover, some knockoffs are priced lower, making it easier for them to invade rural markets where low-income consumers are concentrated. However, besides profit, there are deeper reasons why counterfeit production and sales are repeatedly banned but not eliminated. During interviews, some merchants who sold fakes expressed dissatisfaction with anti-counterfeiting measures on online shopping platforms to Nandu reporters. They even believed that 'if it doesn't kill you, it's not fake' and 'if consumers don't complain, it's not fake'. At the same time, some rural consumers, due to limited purchasing power, default to this low-priced substitute consumption, thinking 'as long as it works'. Even if they unintentionally buy fakes, they choose to 'let it go' because the return and exchange process is complicated. It is this mutual 'tolerance' between merchants and consumers that allows some merchants to disregard rules, take chances, and operate in the gray area of counterfeit production and sales. High-imitation cosmetics, bags, and branded foods are also prevalent in county towns and villages. In fact, Chinese law protects the exclusive rights of registered trademarks. For specific trademarks, use is prohibited without registration or authorization from the trademark owner; intentional confusion that misleads people into thinking it is someone else's product or has a specific connection with others is regarded as unfair competition. These knockoffs not only harm consumers' rights and interests, but their production and sales also constitute brand infringement against the counterfeited merchants. In May of this year, the sensational 'Shanzhai Deppon Incident' once again put Baidu in the headlines. At the end of April, multiple netizens reported that when they searched for Deppon Logistics on search engines, they encountered top-ranked knockoff logistics companies and were deceived. Baidu later responded that 'the knockoff Deppon forged a brand authorization letter from the Deppon brand company to Baidu, and Baidu failed to identify the authenticity of the authorization letter.' In order to combat similar 'Li Gui' (fake counterparts), many 'Li Kui' (genuine ones) have invested enormous money and energy in rights protection. The real Deppon responded that it handles more than 2,000 such complaints each year. Voices Representative Proposal: 'Fight Fakes Like Drunk Driving' In May of this year, at the 2018 China E-commerce Conference, Liu Qiangdong, Chairman of the Board and CEO of JD.com, said that in his hometown in rural areas, nearly 30% of goods can almost be said to be fake. Across the country, a large number of village and town shops and convenience stores are flooded with fakes, with prices higher than in Beijing, causing rural people to pay higher costs and still buy fakes. Earlier in March, Zhang Mao, Director of the State Administration for Industry and Commerce, publicly proposed the goal of 'fewer fakes in the world' at a press conference. At the same time, during this year's two sessions, many representatives and committee members also made suggestions on tackling the problem of fakes, saying 'we should fight fakes like we fight drunk driving' and increase criminal penalties for producing and selling fakes. Zhang Mao once revealed that last year alone, 28,000 cases of trademark infringement were investigated and dealt with. Among online shopping complaints, one-fifth were about counterfeit and shoddy products. Zhu Zhengfu, a member of the National Committee of the Chinese People's Political Consultative Conference and Vice President of the All China Lawyers Association, has submitted a proposal on 'Increasing the Crackdown on Counterfeit Production and Sales' for two consecutive years. Also in March of this year, he said in an interview, 'We must implement industry bans that extend from the production end to the sales, storage, and transportation ends. Only by linking legislation, law enforcement, and judiciary, and increasing the severity of penalties for counterfeit production and sales, can we tackle the problem at its source.' -END-