WeChat Being Used for Pyramid Selling Schemes in China

The popular free messaging and calling app WeChat that allows users to easily connect with family and friends across countries is reportedly being used by some entrepreneurs in China who are engaged in pyramid selling schemes.

The free all-in-one communications app developed by Tencent and launched in the latter part of last year has caught the attention of major e-commerce companies in China, notes Want China Times.

Apparently, the pyramid selling schemers are taking advantage of the WeChat’s Moments feature of the free app by incorporating a ‘Weishang’ to it which means selling products by way of messages.

WeChat Moments is practically like any other social media sites because it offers users updates about their friends the way Facebook, Twitter, Instagram, among others do these days. It has grown in popularity immediately after WeChat was launched late in 2014.

Negative impact

Tencent noted that more than 80% of the products sold through ‘Weishang’ are cosmetic facemasks.

Of late however, businesses saw the downsides and negative impact of conducting selling via ‘Weishang’ especially when a number of disputes started arising over problematic products. One business known as Zhou Menghan, which has 100,000 followers on WeChat, actually saw its business collapse in February after several buyers claimed that the cosmetic masks sold to them did not do their faces good but actually did more harm.

Because ‘Weishang’ is in the social media network site like WeChat, word spread around easily and in no time, Zhou Menghan was not only getting products returned but also losing more sales than it ever projected.

Tencent also raised the issue about the practice of many ‘Weishang’ vendors recruiting secondary distributors which is technically pyramiding scheme as well. It has certainly cast a big shadow over the online business model which may either proved to be a boon or bane depending on how products are received in the market.

But there are still businesses that chose to remain with ‘Weishang’ in WeChat Moments but instead of directly involving people in selling, they are offering to train them and claiming that they can make people become rich overnight.

Magic word

In order to attract attention to followers or those who have WeChat accounts, businesses or event organizers simply include ‘Weishang’ in the title of the event, and they can easily lure more than 1,000 people to take on the training courses.

Once in the training sessions, the training institutions require trainees to purchase software that automatically adds other WeChat users to one’s list of friends or generate Chat, notes the Tencent report.

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Several Chinese e-commerce companies have starting jumping on the ‘Weishang’ business bandwagon. One of these major companies is online retailer JD.com, which has recruited over 100,000 vendors to join its Paipai platform.

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