How to Spot Alibaba Scams [Guide 2022]

1. 1. What is Alibaba.com?
2. 2. Is Alibaba.com Safe Enough?
3. 3. Four Common Types of Alibaba Scams
4.       3.1 Unreasonably Low Prices
5.       3.2 Fake or Invalid Certifications
6.       3.3 Change of Receiving Account
7.       3.4 Unmatched Items  
8. 4. Wrapping Up

1. What is Alibaba.com?

Known as the globally largest Business-to-Business (B2B) e-commerce platform, Alibaba.com connects 34 million buyers worldwide to over 210,000 suppliers with a virtually unlimited catalog of products.Comparing and selecting suppliers at almost no cost is made possible because there is a crowd of competitors in every product category.

2. Is Alibaba.com Safe Enough?

Buyers from every corner of the world can have easy access to various suppliers via Alibaba.com. But concerns may occur before making a payment. Am I being scammed? Is Alibaba.com safe enough? If you are a buyer, you may have endless doubts.

As a B2B platform, Alibaba.com has the responsibility to make the transaction safe. Alibaba actually adopts the rather strict Supplier Assessment, which only allows those legally registered companies without bad credit records to get on board.

Alibaba has developed a powerful sales and service team in the export - oriented provinces in China where its employees check the actual premises of applicant's company, vet the owner's and the legal representative's credit background, and do on-site verification annually to examine whether it is an active supplier.

However, the Supplier Assessment system cannot 100% eliminate fraud. A scamming scandal had engulfed Alibaba.com in 2010 when a large number of newly registered suppliers appeared on the platform and then disappeared after tricking buyers out of money.

According to the report by Reuters, 1107 Chinese suppliers, 0.8% of the total, were implicated in the scam. Alibaba.com CEO David Wei (Zhe Wei) took the blame and resigned.

Supplier Assessment has been lifted to a higher level. Complaints from buyers have been attached to greater attention when the scamming storm blew over. Currently, most of the deals are relatively safe, but the possibility of encountering Alibaba scammers cannot be excluded. It's still important for buyers to err on the side of caution.

But how? As an international logistics partner with Alibaba.com, here we offer you a detailed and professional guideline on revealing Alibaba scams.

Bringing together 17 years of experience in international trade and logistics, Seabay on Alibaba.com has reached hundreds of thousands of overseas buyers and served tens of thousands of them. If you are new to Alibaba.com, this Guide may help you a lot. We intend to show you how to uncover the most common Alibaba scams and help you avoid Alibaba scammers.

3. Four Common Types of Alibaba Scams

3.1  Unreasonably Low Prices

When buyers search for items on Alibaba.com, sometimes they may find unreasonably low-priced products.They may not place an order normally because some sellers set prohibitively high MOQ (Minimum Order Quantity) and freight rates.

This does not necessarily mean an Alibaba scam. Low-priced products can absolutely lure buyers. So it is more likely a marketing stunt to increase traffic and seek potential business opportunities for sellers.

But there are a few suppliers making and selling copies of branded products priced way below the market, targeting buyers who sell fakes to make profits.

The most counterfeited brands are those with high popularity. For example, Nike knockoffs and Louis Vuitton replicas are easy to sell on Alibaba.com. Suppliers usually claim that they are the original manufacturers of the brand, with channels for making much cheaper products of the same quality.

In fact, virtually all the big-name brands opt to work with distributors and agents to sell products through specific networks. It is almost impossible for suppliers on Alibaba.com to get authorized by the original brand holders. But still, some domestic brands may start a self-operated online shop on Alibaba.com.

Copies of branded products can lead to trouble. When transporting internationally, fakes will be seized by Customs. So it is worth noting that buyers will expose themselves to risks when ordering pirated goods on Alibaba.com. They will lose money and get merchandise confiscated.

3.2 Fake or Invalid Certifications

When importing goods, almost all countries or regions have certain regulations and criteria that need to be met in order to ensure quality and safety.

For example, EU countries require CE marking for electronics imported and sold in the EU market. The presence of the CE mark indicates that electronic imports have undergone the assessment and met the general requirements for safety, people's health, and environmental protection. It is viewed as a passport for products to be placed on the EU market.

In order to obtain the certification, suppliers are obligated to send product samples and technical documentation to an inspection company, regulatory body,or testing lab, demonstrating compliance with the essential requirements of the target market.

Only when the inspection and assessment have been given a green-light can suppliers get relevant certifications. It may take months, even years, for suppliers to receive final results.

Since the product compliance process costs time and money, and sometimes complicated compliance issues may conjure up due to industry-specific requirements, not all the suppliers are willing to go through it. Some will make up quality parameters and even forge certifications to deceive buyers into a deal.

Or, some suppliers manage to navigate product compliance procedures via unqualified companies, from which the issued certifications are invalid.

Fake certifications may bring about real “dangers”. Customs will verify any certificates that are required for the clearance. Products with counterfeit or invalid inspection certificates are likely to be seized by Customs.

So buyers might as well review and examine relevant product certifications through an authorized body or official website prior to making deals with suppliers on Alibaba.com.

3.3  Change of Receiving Account

As China implements a foreign exchange control system, foreign currency cannot be moved freely into or out of the country. Some sellers on Alibaba.com may use an offshore account to receive payment for their export, facilitating the process. But buyers should keep in mind that information about the offshore account and supplier may not align.

Before transferring money directly to the seller, buyers should pay extra attention to the seller's receiving account information, checking whether the bank account held by the company matches the registered company on Alibaba.com. The change of receiving bank accounts sometimes means an Alibaba scam.

Why is it? Reasons are manifold. Maybe a hacker somehow breaks into the seller's official email account to fool buyers into sending money. Or, maybe a sales rep, who plans to quit or has quarrels with the boss, exploits the loopholes to cheat buyers.

Buyers should be cautious when getting the sudden notice of change of receiving account of the seller. If buyers find that there are discrepancies between receiving account details and the company information listed on Alibaba.com, please request the seller to issue a formal statement to prove the relationship between them, and confirm whether it is true. 

Also, buyers should make sure the communication is done via Alibaba TM or the seller's official e-mail instead of other instant messengers. It's better to keep the conversation history recorded in the event of disputes.

Alibaba.com recommends Trade Assurance, a built-in protection service that covers orders placed on and paid for through Alibaba.com, to largely avoid disputes. However, it is worth noting that some big suppliers may choose offline deal/off-platform deal instead of Trade Assurance, but it doesn't necessarily relate to scams. Their intention is to receive the payment ASAP.

3.4  Unmatched Items

Some buyers get products that do not match the listing description. Or, they receive defective ones and those of inferior quality.

This kind of scam is not uncommon on Alibaba.com. Some suppliers use photo editing tools like Photoshop to tweak or polish product images, and they copy product descriptions from their competitors. What is posted on the online shop is more attractive, but this is not the case with what buyers actually receive.

Products like surgical masks can only be classified as defective or qualified through documented inspections by professional authorities. So relevant product compliance certificates should not be ignored. Besides, Buyers should pay equal attention to the supplier's qualification, business license, production capabilities, raw materials, in-process quality control procedures, online sales volume, and online customer reviews.

It is also advisable that buyers buy or take some samples from different suppliers before placing big orders. This is called quality check. So buyers can make wiser decisions in their purchases.

4. Wrapping Up

At Seabay, we provide professional services that center on customers. Our expertise is founded on a combination of international logistics business experience and longstanding efforts to e-commerce operations on Alibaba.com.

In this Guide, we hope we can raise the awareness of fending off scams on Alibaba.com, improve the risk-prevention ability of buyers and debunk the common tricks by Alibaba scammers. Our goal is to make ordering and paying through Alibaba.com much safer and easier for you.