In the midst of the trade war between the US and China, the US has imposed tariffs of up to 145% on Chinese goods, leading to a sharp decline in orders from American consumers for Chinese foreign trade enterprises. Recently, in order to survive, some Chinese businesses have turned to direct sales to American consumers through the e-commerce platform “DHgate.com,” rapidly making it the second most popular platform in the US. Experts believe that this practice may not only provoke stronger retaliatory measures from the US but also potentially impact China’s overall export image and the credibility of “Made in China.”
According to reports from “Sing Tao Daily,” the US has imposed tariffs as high as 145% on Chinese goods, making it difficult for many Chinese enterprises to receive orders from the US. In order to circumvent the high tariffs imposed by the US on Chinese goods, some Chinese manufacturers are bypassing brand customers and directly selling goods to American consumers on DHgate.com. Many Chinese manufacturers claim to be OEMs for renowned brands such as LV, Hermès, and Audemars Piguet, but in reality, they are selling “high-quality imitation goods.”
The report states that these Chinese manufacturers present themselves as OEMs for American brands, selling “brand-name products without logos” at low prices on DHgate.com. Due to their affordable prices, they are favored by American consumers. As a result, the DHgate.com app has gained popularity in the US, attracting a large number of users and becoming the second most popular platform after ChatGPT.
The proliferation of counterfeit goods by Chinese manufacturers has impacted US customs supervision. The “International Financial Times” commented that this trend of counterfeit goods could potentially disrupt the original premium pricing system of luxury brands and increase the difficulty of supervision, especially against the backdrop of intertwined tariffs and intellectual property rights.
Founded in Beijing in 2004, DHgate.com is a Chinese e-commerce platform positioned for business-to-business (B2B) and business-to-consumer small cross-border transactions. According to financial industry sources, DHgate.com has attempted several times to conduct its initial public offering fundraising in Hong Kong since its inception, but has not been successful due to underperforming financial results.
In response to tariff barriers, some Chinese manufacturers are taking steps to “legally evade” US tariffs by showcasing behind-the-scenes videos of luxury goods on DHgate.com, becoming a hot topic on TikTok.
The owner of a mainland China leather handbag OEM factory, Old Wang, eloquently introduces in English online, saying that an Hermès Birkin bag priced at $38,000 in the US is mostly charged for its brand logo, and those seeking the same quality and material without the logo can purchase the same item without it.
Old Wang breaks down the factory cost of an Hermès Birkin bag, with one piece of material costing $150, Italian-imported edged leather oil costing $50, French-imported lambskin lining costing around $100, the zipper costing $10, labor costs about $600, packaging $10, totaling $1,400, sold by the factory.
John Olin Palm Chair Professor of Marketing at the University of South Carolina’s Darla Moore School of Business, Xie Tian, told Epoch Times, “DHgate.com is just another copy of Temu and SHEIN, emphasizing no brand on their products. A design without a logo violates commercial terms, essentially stealing the patents of the original design and making minor changes. It may be challenging for the original brand companies to hold them accountable for intellectual property disputes.”
“The reason for not using brands is due to the absence of a brand, making the products very cheap, priced at just a few dollars, $4.99, etc. These are extremely low-priced items. Essentially, it is an online retailer, and American consumers are already familiar with these cheap commodities from China through Temu and SHEIN. Having a second Temu emerge doesn’t have any uniquely advantageous features. The items all appear to be inexpensive goods, very low-priced,” Xie Tian said.
Xie Tian remarked, “DHgate.com’s fatal weakness is that it takes a month to receive orders. In other words, these products haven’t physically reached the US yet but are sent one by one through methods like Temu and SHEIN. This time-consuming process is what many people find unacceptable given that Americans can receive Amazon orders the next day or even on the same day. So many people cannot accept this method.”
The Trump administration has raised tariffs on goods priced below $800 from $25 per item to $50, which, after two retaliations from the Chinese government, escalated to $150 and then to $200.
Xie Tian believes, “Shipping from China incurs no tax exemption, and the lengthy transportation time raises doubts about the potential of platforms like DHgate.com. ”
In traditional business models, Chinese manufacturers primarily rely on brand orders and export to the US. However, after the trade war, with the US imposing 145% tariffs on Chinese goods, brands are trimming or canceling orders, leading to supply chain disruptions and inventory backlogs. To survive, Chinese manufacturers are turning to direct sales (B2C), utilizing platforms like DHgate.com, Temu, and SHEIN to directly target American consumers at extremely low prices, bypassing brands and distributors.
Sun Guoxiang, Assistant Professor at the Wenzhou Research Institute of South China University and Director of the Asian Studies Institute at South China University, told Epoch Times, “The advantage of this approach is that cost control remains in the hands of Chinese manufacturers, providing a price advantage. Direct online sales can avoid some intermediary costs, and even with tariffs, there is still profit margin. AI tools and improvements in cross-border logistics have reduced barriers to direct sales.”
“If manufacturers produce based on designs commissioned by brands (such as clothing styles, electronic technology, etc.) but shift to B2C self-operated sales without authorization, they may be involved in patent infringement (if designs/technology are patented), copyright infringement (if involving original design drawings), trademark infringement, and unfair competition (if selling under false or brand-confusing names). In addition, these manufacturers originally signed OEM agreements with brand companies, with explicit provisions often stating ‘prohibited from self-sale or reproduction’; unauthorized sales constitute a breach of contract,” he said.
Sun Guoxiang states, “The US government and brand owners’ responses may include filing infringement lawsuits (through Section 301, ITC 337 investigations), strengthening customs inspections and seizure of infringing products, and requiring platforms such as DHgate.com and Temu to proactively remove suspected infringing products. Of course, the platforms also face legal pressure: if they do not effectively verify the legitimacy of products, they could be considered accomplices or condoners of infringement. US brands have already filed infringement or unfair competition lawsuits against Temu, SHEIN, and others.”
Regarding this shift from B2B to B2C and facing overseas consumers directly, Sun Guoxiang believes that “in the short term, it can alleviate inventory and financial pressures, and even regain export momentum in some niche markets. However, this model also exposes high risks from a regulatory and ethical perspective. Continuously eroding brand trust and violating intellectual property rules may not only provoke stronger retaliatory measures from the US but also potentially affect China’s overall export image and the credibility of ‘Made in China.'”