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200,000 Fake Sneakers Seized During Pandabuy Raid

Pandabuy Raid

In a sweeping crackdown on counterfeit goods, Chinese authorities recently raided Pandabuy, an online sales platform notorious for facilitating the global trade of counterfeit products. The operation resulted in the seizure of over 200,000 pairs of counterfeit brand-name sports shoes, including fake Nike and Jordan sneakers, and the detention of numerous individuals associated with the platform. Alongside this raid, Pandabuy also suffered a data breach that affected 1.3 million customers.

According to ManagingIP, an investigation into Pandabuy began in November 2023 following reports from the “Asia-Pacific intellectual property team of a renowned global footwear brand,” which was concerned about the domestic sale of counterfeit shoes on Chinese e-commerce platforms. These concerns prompted the intellectual property protection firm Cantoop to act on behalf of the rights holders and collaborate closely with law enforcement agencies.

Before news of this investigation and the subsequent raid occurred, Nike began legal proceedings against two prominent influencers in the replica fashion community, Cedaz (whose real name is Eben Fox) and Nicholas Tuinenburg. The two consistently promoted the use of Pandabuy in their online content.

Pandabuy, which primarily serves as a shopping agent by linking sellers and overseas buyers, had long been under scrutiny for its role in the widespread distribution of counterfeit luxury goods and sports apparel. Despite not manufacturing these items, Pandabuy had become a key node in a vast network that enabled the proliferation of counterfeit goods globally, leveraging platforms like YouTube, Facebook, Instagram, and TikTok to reach millions of customers outside China.

The raids culminated over six months of meticulous investigation involving coordination between stakeholders, including international brand owners, Chinese law enforcement, and multiple intellectual property service providers. The brands included Nike, Supreme, adidas, and more. The operation was part of the UK's long-running Operation Ashiko, focusing on online intellectual property crime, and was significantly supported by Cantoop, which provided 70 investigators to assist with the probe.

Seized Products From Pandabuy Raid
Seized Products From Pandabuy Raid (image via ManagedIP)

On April 11, 2024, law enforcement teams comprising about 200 personnel from various public security levels raided Pandabuy’s operations in multiple cities across China. This operation included significant sites in Hangzhou, Pandabuy’s main offices, and other logistic hubs in towns like Putian, Xiamen, Huizhou, Wenzhou, and Harbin.

In an article from Bloomberg, Detective Inspector Andrew Masterson of the City of London Police highlighted the unprecedented scale of this collaborative effort: "This is the first time that collaboration between brand owners, law enforcement, law firms, and service providers across the world has resulted in action against a counterfeit shopping agent of this scale."

The immediate outcomes of the raids were substantial. Authorities detained over 30 key suspects and seized millions of pre-packaged parcels destined for overseas customers, with counterfeit shoes making up over 90% of the seized goods. Pandabuy's extended reach of operations was further highlighted by the disclosure that the platform had employed over 2,200 workers.

Seized Products From Pandabuy Raid
Seized Products From Pandabuy Raid (image via ManagedIP)

Moreover, the financial implications of these counterfeit operations were staggering. Preliminary audits by law enforcement showed that in 2023 alone, Pandabuy’s revenue from counterfeit sales amounted to approximately RMB 39.6 billion (about 5.7 billion USD), involving more than 50 million pieces of counterfeit goods.

Following the raids, Pandabuy has faced significant legal challenges, including the possibility of further action against its assets. The company’s public response has been limited, with an automated email stating they are "fully collaborating with the relevant authorities to ensure that all our business activities comply with legal regulations."

The raids have also prompted a broader discussion about online platforms' responsibilities in preventing the sale of counterfeit goods. Many seized items were reportedly set to be inspected and stored in warehouses designated by law enforcement, a process expected to take several more months.

As authorities continue to process the seized items and legal proceedings move forward, the Pandabuy raid will likely serve as a crucial case study in the ongoing battle against intellectual property infringement on a global scale. As of this writing, Pandabuy has communicated to its customers that they will eventually return to normal business operations, though that may not be the case.

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