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This story is shared by an ex-founder who revealed how fake cosmetic products are sold to unsuspecting Malaysian consumers.
Emma’s dream was to start an honest cosmetics business in Malaysia. But instead, she was taught how to sell cosmetics made with ‘timbang kilo’ ingredients that harmed the skin.
It all started when she was invited by a friend to join a “founder community” group based in Kelantan.
“We’d take a year’s worth of selfies in luxury houses”
This shady group taught Emma how to build a personal brand on Facebook and Instagram by becoming a social media influencer.
SInce she had no assets, they would rent out their luxury houses to her for a few days. In that time, she took thousands of selfies, over a span of several days, wearing different outfits and posing in different parts of the house.
“The pictures would be scheduled to post each week on social media,” Emma shared.
Emma also rented out luxury cars from them, with a cost of rental coming up to more than RM20,000. However, those who failed to get enough sales would be forced to return the luxury cars. Emma took out a loan of RM 40,000 to fund this venture.
“This fraud can be concealed because the car is registered under my name and the license plate has been changed,” said Emma.
“We’d use Thai factories to produce dirt cheap products”
When it came to sourcing the products locally, Emma was advised by the group to use the services of a factory in Thailand.
Some of these factories were known by the locals as timbang kilo (fake kilogram) factories, because when the ingredients are placed on a weighing scale, the weight shows that they are fake ingredients.
Image via Emma Harshaw on Facebook.
For a Thai “Timbang Kilo” factory, the cost of production was RM 3.40 per unit, whereas in a Malaysian factory, the cost would be RM10.80. With a product cost of RM 15,000, Emma dug into her savings of RM10,000 to make it work.
Despite the overt fraud, many Timbang Kilo products are marketed as “approved by KKM”, because they submit a quality product for approval but sell the cheap product to customers, according to Emma.
“We would create thousands of fake 5-star reviews.”
Once the first few batches of products were made and shipped, the group would advise her to flood her product with fake 5-star reviews. To access their database of fake reviewers, she had to pay a fee of more than RM 5,000.
“We created and exchanged fake reviews along with other agents and founders. At the time, there were about 40-50 agents in Malaysia.” said Emma.
“I managed to sell 6000 units in under a week through these agents,” Emma shared. She revealed that she earned a clean profit of RM 40,000 within just one month.
However, she used a local Malaysian factory, which were more expensive due to requiring GMP accreditation.
Founders who used the Thailand factory, meanwhile, could net profits to the tune of RM 200,000. “With the fake ingredients, they can sell a bottle that costs RM1 for RM60,” revealed Emma.
“I felt so guilty that I couldn’t continue.”
After just one sales cycle, Emma stopped operations completely.
After the first batch of products were sold, customers complained of skin damage and ineffectiveness. In response, founders would issue a statement that the first batch was fake, switch product manufacturers, and customers are deceived into buying a second batch.
“Whenever I spent that money, I didn’t feel like I had earned it through honest means,” Emma shared. “When you start with deceit, you have to cover it up with more deceit too.”
In her Facebook post, Emma mentioned that she just wanted to share her personal experience, and she didn’t mention the name of the founder or the company.
“I hope KKM can increase their efforts to crack down on this fraud. This is one of the biggest frauds committed by the founder community,” said Emma.
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Read also: How I Used RM15,000 to Break a Local Syndicate’s Monopoly on Resold Nintendo Games in Malaysia
How I Used RM15,000 to Break a Local Syndicate’s Monopoly on Resold Nintendo Games in Malaysia
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