Southeast Asia’s e-commerce market is forecast to be worth at least US$300 billion by 2025. Photo: Handout
Shane Britten
Shane Britten

Online shopping booms in Southeast Asia but buyers may be one click away from organised crime

  • Asean has long been a fertile hub for counterfeit products, partly due to its proximity to China, which is the world’s largest manufacturer and consumer of fake or illicit goods
  • Legitimate businesses have been forced to adapt to changing rules and protocols because of the coronavirus pandemic, but black market operators ignore such controls
For many of Southeast Asia’s 655 million people, online shopping provides welcome relief from the pain, struggle and sheer boredom of the coronavirus pandemic.

Whether they’re using Bukalapak, Carousell, Lazada, Shopee or Tokopedia, most shoppers have their personal favourites. A few clicks and a blouse is delivered. Or maybe an exercise bike to stay fit at home.

Of course, most online shopping relates to legal and healthy products, but there is also a lucrative trade in illicit goods. The list is long and colourful: electronic cigarettes, synthetic drugs, counterfeit medicine – even toys that have not been subject to safety testing. While governments have been distracted by the pandemic, criminals have taken advantage of this thriving and poorly policed online marketplace.

Thai general Manus Kongpan, jailed for trafficking refugees, dies in prison

Asean has long been a fertile hub for counterfeit products, partly due to its proximity to China, which is the world’s largest manufacturer and consumer of fake and illicit goods.

A 2019 report by the United Nations Office on Drugs and Crime valued the region’s trade in counterfeit goods, excluding fraudulent medicines, at US$35.9 billion annually. The online market for these goods was valued at US$260 million per year.

These numbers have likely surged as a result of the pandemic and the recent e-commerce boom in Southeast Asia, where the market is forecast to be worth US$300 billion by 2025, according to a 2019 study by Google and Temasek, before Covid-19 further propelled online retail demand.

The EU-Asean Business Council last November published a paper about the effects of the pandemic on Southeast Asia’s online black markets. It noted that sites such as Carousell and others have already been earmarked on the US Trade Representative’s Notorious Markets List for counterfeiting and piracy.

Legitimate businesses have been forced to adapt to changing rules and protocols because of the pandemic, but illegal outfits are more likely to ignore such controls. For example, the sale of illicit tobacco boomed when Malaysia enforced its Movement Control Order – authorities lost an estimated 1 billion ringgit (US$237 million) in taxes that went unpaid.
In Singapore, where vaping is illegal, products remain easily accessible online on platforms such as Telegram. The practice has increased dramatically during the pandemic, and The Straits Times reported an 81 per cent increase after conducting an online survey. Many respondents said vaping products were easy to smoke while working from home.

These black markets may seem harmless to the average consumer. After all, the only victims are the conglomerates whose items are being stolen, replicated or imitated? Wrong.

Victims of these illegal trades are often unseen, unheard and not immediately obvious to the consumer.

Imagine the manufacture, distribution and sale of illicit goods as a pipeline. It is only when we consider each step of that process that the impact of this activity on our countries, communities and fellow citizens becomes clear.

Around the world, there are almost 25 million people trapped in forced labour. Of those, 16 million are exploited in the private sector, according to the International Labour Organisation.

In particular, Thailand and the Philippines have faced severe challenges confronting human trafficking.
Rohingya migrants drifting in Thai waters off the southern island of Koh Lipe in the Andaman Sea. Photo: AFP

Many victims are involved in the manufacture of illegal goods on behalf of criminal syndicates whose entire business model involves low- or no-cost labour. The aim is to keep manufacturing costs as low as possible, maximising profit.

Goods sold on the black market must also be transported. If criminal syndicates can find ways to smuggle millions of cigarettes illegally, the same pipelines can be used for human trafficking and smuggling drugs.

When governments lose billions in tax revenues, the effects inevitably rebound on the public. Every dollar lost through trade in illicit alcohol or tobacco is a dollar less for a school in Sumatra, a hospital in Phnom Penh and to fix a pothole in a road in Ipoh.

Members of the Philippine Drug Enforcement Agency with more than 160kg of methamphetamine concealed in tea wrappers. Photo: AP

Consumers need to become more aware of these costs, and authorities must implement stronger border controls. Beyond that, sharing information within public-private partnerships is vital, encompassing tech, tobacco, alcohol and pharmaceuticals markets.

In January, Australia announced a new programme to help Southeast Asia combat trafficking of tobacco, drugs and people. This Mekong-Australia Programme on Transnational Crime has a budget of US$30 million over eight years.

We need to see more of such initiatives. Online shopping should create joy, not crime and misery.

Shane Britten is CEO of Crime Stoppers International, a global non-profit organisation to educate communities about transnational crime.