NetEase Kaola Denies Fake Makeup Sales, Casts Doubt on Appraisal Body
Liao Shumin
/SOURCE : Yicai
NetEase Kaola Denies Fake Makeup Sales, Casts Doubt on Appraisal Body

(Yicai Global) Feb. 9 -- NetEase Kaola, an e-commerce platform of leading Chinese tech firm NetEase Inc. that has rapidly emerged as a low-cost model for overseas sales in recent years, underwent grilling on Feb. 7 by China Consumers Association (CCA) for selling fake products. NetEase Kaola took a tough stance on its official Weibo microblog account yesterday, asserting the Estee Lauder cosmetic products in question are authentic, and impugning the qualifications of the accreditation body CCA designated.

NetEase Kaola has now confirmed that the subject product (Estee Lauder ANR Eye Serum in 15-milliliter brown bottle) is genuine. The source of the goods is clear and reliable, and it is an authentic product normally sold overseas. NetEase Kaola has further provided a clear and reliable authentic certificate to the association, the statement recited.

NetEase Kaola seriously impugned the qualifications of the appraising body CCA designated and claimed the report is completely wrong and inflicts great harm on its users. It also filed a proposal for supervision with the State Administration for Industry and Commerce, to which CCA is subordinate.

NetEase also announced its last-year earnings that same day. The significant added contribution of its e-commerce business induced it to separately disclose its performance for the first time.

NetEase gained revenue of CNY54.102 billion last year, up 42 percent from the year before, and net profit of CNY11 billion, the report shows. Of this, NetEase's e-commerce business income reached CNY12 billion, making up 22 percent of the total. The e-commerce business is currently already Netease's most important source of income.

"Chinese consumers have a huge desire to buy foreign goods. Kaola has great potential in cross-border e-commerce and has advantages in terms of price and category. China is also the world's largest factory … In the long run, NetEase's e-commerce business will continue to grow," said Ding Lei, its chief executive.

NetEase e-commerce business mainly consists of two major lines, NetEase Kaola, which formed in January 2015, and NetEase Yanxuan, established in April 2016. The former has become China's largest importer of cross-border e-commerce goods and took the lead in the sector's market share for the two years 2016 and 2017, holding on to top spot in terms of storage area.

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Keywords: Netease , Kaola , Electronic Commerce