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Wildberrie(s) season in Germany

Russia’s biggest online marketplace, Wildberries, is coming to Germany. Wildberries’ mixed market model provides a lot of opportunities for counterfeiters and grey marketers. Find out how this damages your brand and how globaleyez can help you protect it.

Wildberries, the biggest Russian online marketplace is coming to Germany. The Wildberries app is already available in the German iOS App store, and potential customers can also place their orders via de.wildberries.eu.

After Poland and Slovakia, Germany is the third EU country where Wildberries’ service becomes available. Regarding next destinations, the company seems to have set its eyes on France, Spain, and Italy.

While relatively unknown in Europe, Wildberries is definitely not unknown to us at globaleyez. We have already reported on the company back when it first set its sights on an expansion into Europe.

What makes Wildberries different

Wildberries is a mixed marketplace offering both online and offline services. For example, customers have the opportunity to order several sizes of a specific item, and - just like in a brick-and-mortar store - try them on at their chosen Wildberries pick-up point. They can keep the size that fits and send the others back without any hassle.

Considering that shopping fails are one of the biggest reasons deterring customers from ordering online, it’s easy to see why this Wildberries feature is popular with shoppers.

As well as working with third party sellers like Amazon or eBay, the company has direct links to (and offers the products of) over 40.000 brands in categories like apparel, cosmetics, electronics, footwear, books, home decor, and much more.

Clearly, the strategy is successful. Since its 2004 founding, Wildberries has become the largest online marketplace in Russia with over 48.000 employees and just under 15% share in the fragmented market.

It’s even more astonishing to consider that Wildberries seems to have achieved this without any major capital investmentsfrom third parties. In fact, Wildberries’ sole owner is the company’s founder and CEO, Tatyana Bakalchuk, who went from Moscow English teacher to the richest Russian woman with a $1.1 billion fortune. That would be an amazing achievement in any country, but in Russia, it borders on miraculous.

Counterfeits on Wildberries

Although Wildberries is not known as a trashy marketplace, we can’t say the platform is free of counterfeiting and grey marketing.

The company does make a stand against counterfeiting. Once a product is flagged as counterfeit, it’s clearly marked on the platform and becomes unavailable for sale. However, here’s the problem: what if nobody notices (or bothers to inform Wildberries) that a product is counterfeit?

globaleyez is ready for situations like that. Our online brand protection services, including marketplace monitoring and test purchases are geared towards detecting even well-concealed counterfeits and taking all necessary action against them to protect your brand.

Grey markets on Wildberries

Just like counterfeiters, grey marketers have stumbled upon Wildberries as well.

Grey marketing is when a product is sold outside its official distribution network, distorting the market and causing brands immense loss in revenue and customer trust. Again, although Wildberries doesn’t work with third party sellers, it does acquire its products from various sellers. What if some of those sellers don’t have the authorization of the brands whose products they sell?

In fact, Wildberries seems to be a very lucrative place for grey marketers. After all, among the platform’s vast amount of products acquired from all over the world, would Wildberries have the time and means to check if all sellers are authorized by brands?

Well, even if they don’t, brand protection experts at globaleyez do. Our comprehensive tools and services were designed to detect grey marketers on online marketplaces and prevent them from doing your brand any further harm.

Let’s look at an example.

This listing on Wildberries offers Dior’s Diorshow Maximizer 3D eyelash primer.

Screenshot: Wildberries Dior Mascaras
Screenshot: Wildberries Dior Mascaras

This is Dior’s own website, showing the same product.

Screenshot: Original DIORSHOW MAXIMIZER 3D Mascara
Screenshot: Original DIORSHOW MAXIMIZER 3D Mascara

Comparing the two can help us decide if we’re dealing with a counterfeited product or a grey market issue.

Although using a different promo picture, Wildberries seemingly displays the same product as Dior. However, the similarities end here.

Wildberries doesn’t offer a lot of information about the product, whereas the Dior site lists ingredients, usage advice, and lots more. This may not be a problem in itself; after all, it could be a simple choice of design on Wildberries’ part.

The origin of the product is not listed on Wildberries. Again, this may have a legitimate reason as well: everyone could assume the origin is Dior itself or an authorized seller.

But the price definitely raises a red flag. Wildberries offers a 56% discount on the product. If ordered through the platform, this product costs 28.69 €, down from an “original” 65.22 €. However, Dior itself offers the mascara primer for 37 €.

Even this could have an honest explanation: an authorized seller offering a discount and using a dirty trick to make it look bigger. But it’s too big of an issue to ignore.

In a situation like this, further investigation would be needed. For example, globaleyez’s test purchase, marketplace monitoring, sales tracking, and partner compliance services could help us determine if we’re dealing with a counterfeit, a grey market product, or an authorized seller going rogue.

Conducting a test purchase is the best way to find out if the product is genuine and offered via the legitimate distribution network. When we order the product, we document everything, including the original seller. To complement the test purchases, our marketplace sales tracking service shows the volume of sales of particular products and sellers. This way, we can learn exactly who is selling what and how much of it, separating the big fish from small timers.

We compile our findings into a thorough report and advise you on suggested next steps. All our documentation is admissible in court, which means that should you decide to take legal steps, we’re able to assist with that.

Conclusion

As seen in the above example, grey market sellers cause brands serious harm. The lower price distorts the market and makes it difficult for brands to calculate margins. Not to mention the uncontrollable competition and the incurring loss of trust within the distribution network. Grey market sellers should be stopped, and globaleyez is ready for the task.

Due to its novelty in Europe, brands may not be aware of the immediate danger Wildberries poses. globaleyez is here to help. Reach out to us and find out how we can help protect your brand.

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