CASE NO.

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Accusation of selling counterfeit
and fake products: A Snail Online
Shopping Company Case Study
Presentors:
Hello!
I am
◦ Bernandino, Sherlyn Mae
◦ Duran, Ma. Adrienne
◦ Oliveros, Trishia Mae
◦ Sarmiento, Sherry Ann
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Company Background
The Snail online shopping company is one of the leading
online shopping site in the Philippines. The snail group was
founded in 2012 by Rocket Internet to bring a high quality online
shopping experience to Southeast Asia, present in Indonesia,
Malaysia, Philippines, Singapore, Thailand and Vietnam. As the
pioneer of the e-commerce ecosystem in the Southeast Asia, Snail
has 155,000 sellers and 3,000 brands serving 560 million
consumers in the region through its marketplace platform,
supported by a wide range of tailored marketing, data and service
solutions.
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I.
Point of view
Mr. Ethan Balci is the co-founder of the Philippines’
biggest online retailer, Snail Philippines. Since Mr. Balci is the
CEO of Snail Philippines, he is the person that is most
responsible on the activities of Snail Philippines. Although he
don’t manage the e-commerce company directly, he is the master
mind of the ideas, the main controller of the activities and Snail
can be operate and manage only with his approval.
Figure No. 1
Organizational Chart 5
II.
Synopsis
Snail online shopping company sued by distributor of Attitude house
in the Philippines on October 2015. The distributor of the Korean brand and
the shopping company took an investigation relating to the allegations that
Snail is selling Counterfeit and fake product of attitude house and leads to a
customer’s personal damages. Even if the Snail make an immediate action
and take responsibility on the case, Attitude house pushed through the criminal
case against Snail for the protection of their customers/ complainants for
violations of Sections 155, 168 and 169 of the Intellectual Property Code due
to the selling and/or facilitating the sale of fake and/or counterfeit Attitude
House of Korea products. After this incident, there are currently no Attitude
House products being sold in Snail online shopping site.
III.
Problem Analysis
Statement of the problem
This case study aims to determine the ways to avoid the
selling of counterfeit and fake products in Snail online shopping site.
Specifically, it will also answer the following:
1. What are the effective ways or strategies to avoid or reduce the
selling of counterfeit and fake products in Snail online shopping site
that can be implemented by the management?
2. How can the management make solutions if the selling of
counterfeit and fake products occurred?
3. What are the best alternative solutions can be recommended?
IV.
Areas of Consideration
Strengths Weaknesses
 One of the most trusted online shopping  Anyone can be a seller without proper
site in the Philippines. authorization process,
 Brings convenience to the consumer and  Very easy to access.
does not require more physical activity to  Reduce consumers’ interest in physical
operate. markets.
 Shows different prices at lowest price
products.
 Control supply and demand chain
Opportunities Threats
 Can be the leading online shopping site  Competitive markets of other online
in the world. shopping sites/ company.
 Can improve new technology and  High goods and service tax.
innovations.
 V.
Problem flow Diagram
An unauthorized Customers bought Consumers
retailer shop sells Consumers
some counterfeit/ complain about the
fake or counterfeit encountered
product of Attitude fake product from damages by using fake products to
House through Snail the unauthorized legit distributor of
the fake products.
Application. seller. attitude house.

Attitude House and The investigation

Attitude house file a Attitude House is
Snail conducted proves that the
case against Snail not a seller on snail
their separate snail is liable for
online shopping online shopping
investigation about any damages to the
Company. site anymore.
the complain. customers.
VI.
Alternative Soluion
After analysing the problems the analysts came up with these alternative solutions:
Solution 1: The seeking of authorized retailer is one of the solution to prevent
counterfeited products from its widespread.
Solution 2: There should be a contract that the seller is liable and responsible on
any damage caused by selling unauthorized products. (If ever they still want to
counterfeit and fake products)
Solution 3: Educating the consumers about counterfeit products; how to prevent
and what are the risks. To spread awareness.
VII.
Evaluation of Alternative Soluion
Solution 1: The seeking of authorized retailer is one of the solution
to prevent counterfeited products from its widespread.
PROS CONS
 Provides more security  Only few retailers can sell
 Gives opportunities to the  Can reduce the quantity of the
branded products. products in the markets.
 Protects the consumers by the  Can affect the no brand- local
dangerous effects of fake products.
products.
VII.
Evaluation of Alternative Soluion
Solution 2: There should be a contract that the seller is liable and
responsible on any damage caused by selling unauthorized
products. (if ever they still want to counterfeit and fake products)
PROS CONS
 Counterfeited products can be  Low of sellers’ desire to open
reduced shop in snail.
 Protects the reputation of the legit  The legit shops can declare their
brands and their products. own SRP which can make
 Sellers can be more careful and products expensive.
responsible for any damages.
VII.
Evaluation of Alternative Soluion
Solution 2: Educating the consumers about counterfeit products;
how to prevent and what are the risks. To spread awareness.
PROS CONS

 It will prevent damages to  Can decrease the consumers’

consumers. interest to buy.
 The consumers will be wiser  Can decrease the demand of
in choosing products. the products which can lead to
bankruptcy.
VIII.
Decision
Seeking of authorized retailer is one of the solution to
prevent counterfeited products from its widespread.
That is why Snail Company have decided to be stricter to
their distributors. The management should carefully examine them
first and when they think that they can be trusted, they will be an
official distributor of the company. There should be a proper and
strict authorization process before considering as a seller on Snail.
IX.
Implementation
IX.
Implementation

Only sellers that undergo in the proper process and have a

certificate can sell in snail online shopping site
X.
Contingency Plan
In case that solution 1 didn’t work, the researchers
recommend to use solution 3 as alternative solution.
Solution 2: Educating the consumers about counterfeit products;
how to prevent and what are the risks. To spread awareness.
XI.
Management Concept Manifested
in the case
Attitude house filed a criminal case against snail for
violation of section 155,168 and 169 of the intellectual property
code due to the selling or facilitating the sale of fake and/or
counterfeit etude house of Korean products. Section 155, 168, and
169 under the intellectual property code protects the intellectual
property rights.
 XI.
Management Concept Manifested
in the case
One of the important management concept are coordinating and
controlling. In this case, it is very significant that they manifest these concepts.
These concepts are can be applied in outside the company’s problem. Using it, Mr
Balci are enable to fix the issue with attitude house and clear the company’s name.
Coordination is very important, it is the way they can handle the situation and the
case that I filed against them, and they also need to comply with all the remedies
that the court or the complainants will say, in that way they will acted in Goodwill
and there’s a chance that the case will be dismissed.
 XI.
Management Concept Manifested
in the case
Next is controlling. After this incident, Mr Balci should
control and manage his company in respect on their past
mistakes that put the company in danger. As a CEO, Mr Balci
is the only person that will do this, since he is considered as
the most powerful person in Snail Philippines.
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