Takealot threatened with criminal charges

Blue Sky Distribution has warned Takealot that it will seek criminal prosecution against the platform and its chairperson after allegedly allowing counterfeits of a RapidLash-branded product on its platform.

RapidLash is a trademarked eyelash hair loss serum developed by an American company and distributed exclusively by Blue Sky in South Africa.

Blue Sky CEO Wayne La Grange said the product was not for sale through Takealot, yet they regularly found counterfeits on the platform.

He explained that they sell RapidLash exclusively through licensed professionals and had informed Takealot of this.

In a recent segment on investigative journalism programme Carte Blanche, La Grange said they bought one of the knock-offs through Takealot as a test and sent it to RapidLash headquarters in California.

RapidLash’s tests found that the product sold through Takealot was indeed a fake comprised mostly of water.

In an interview with MyBroadband, La Grange said that they contacted Takealot to provide details about the counterfeit — including who the merchant was and how much was sold.

He said Takealot provided some vague information, which has led them down this path.

Despite the lack of help, La Grange said they tracked down the vendor who sold them the fake.

RapidLash’s attorneys in South Africa, Adams & Adams, served her with a cease and desist letter.

La Grange said the vendor has confessed to trading in counterfeit goods as part of a civil case against her and that the next step is a criminal case.

He said they plan to subpoena Takealot as part of the criminal proceedings for proof that it does due diligence to block counterfeits. They also want to know how many fakes were sold on the platform.

He said they had already obtained a transaction record from the counterfeit seller showing that she turned over R100,000 between November and January.

In addition to going after local sellers, they also identified the distributor in China supplying the counterfeit goods.

La Grange said this information has been handed to officials in the United States for follow-up.

Following Takealot’s refusal to provide them with information about the counterfeit seller, La Grange said Blue Sky sent a notice of pending litigation and a pending warrant of arrest for Takealot Group executive chair to Mamongae Mahlare.

Mahlare replaced Takealot founder Kim Reid as Group CEO in 2021. She served in the role until 1 February 2024, when she became executive chair and Frederik Zietsman took over as CEO.

MyBroadband asked Takealot for comment, but it did not respond by publication.

Takealot told Carte Blanche that it has a strict zero-tolerance policy towards counterfeit goods.

It said that on the rare occasion that they are sold, they terminate the seller’s account, refund the buyer, recall the product, and take legal action.

The challenge of counterfeits and knock-offs being sold through legitimate online marketplaces is not unique to Takealot or South Africa.

Last week, Ridge Wallet CEO Sean Frank published a Twitter thread lambasting Amazon for allowing knock-off products on the platform that violate their patents.

Viewers of popular technology YouTube shows such as MKBHD and Smarter Every Day will have seen Ridge Wallet featured as a sponsor in several of their videos.

Frank posted screenshots of a patent they uploaded to Amazon and an email from a director and associate general counsel responding to a takedown request for a competing brand called Mountain Voyage.

“Stop attacking Mountain Voyage through our processes when you’re in litigation with them. I frankly find it troubling that you thought it was acceptable to go after Mountain Voyage on related patents to the ones in the lawsuit,” the email stated.

“And, after we have had so many communications on the topic, you neglected to mention the relevant facts when you reached out to me to ask why your takedown notices weren’t successful,” it continued.

“If something is genuinely broken in our processes I will try to help fix it in the future, but otherwise please stop contacting me; I do not wish to have contact with you.”

According to Frank, despite selling over $50 million (R927 million) worth of stock through Amazon, they cannot get help dealing with the obvious knock-offs on the platform.

“I want a fair and open system. I want to live in a world where a thousand e-commerce flowers bloom,” he said.

“You can sell any wallet, just don’t sell my exact one. Change something!”

It’s not just Ridge, either. Frank said Amazon is a hotbed of knock-offs and copyright violations.

He pointed to a seller offering Pokémon-branded iPhone cases and expressed doubt that a merchant called “yyjy2021store” somehow obtained a licence for the product from Nintendo.

“Every search has the same four things: Ads, counterfeits, AliExpress slop, and more ads,” he said.

Frank said Amazon has become a “Temu Junior” because it simply doesn’t care and makes more profit in the short term by refusing to protect intellectual property holders.

“Amazon is a literal trillion-dollar company. If they wanted to have a clean marketplace, they could get it done in two days,” he said.

“They want to create systems where they never make a decision.”