Large Chinese iPhone supplier caught smuggling into the country, by housewives

Lanyou Shuma, one of China's largest suppliers of iPhones and iPads, were recently tried in court for evading taxes by smuggling iPhones into the country. Over the past 2 years Lanyou Shuma has managed to smuggle over $80M worth of iPhones into China. The most interesting part is that they were doing it by having what looked like typical housewives smuggle them into Hong Kong.

Half of the suspects are described as housewives who frequently travel to Hong Kong, according to another newspaper, the Southern Metropolis Daily, adding that they were paid 20 to 30 yuan in commission for each phone they brought back to the mainland.

The iPhones would be hidden under clothing or strapped to the woman in a way that would conceal them while on the flight. I don't know about you but a long flight with a bunch of iPhones strapped to your body probably isn't the most comfortable way to travel.

The main reason suppliers like Lanyou Shuma smuggle iPhones into the country is to avoid import and other kinds of taxes they would otherwise have to pay on the merchandise. A total of 26 defendants were arrested on charges of smuggling the phones into the country but it wasn't clear yet if all of them worked for the same supplier.

Taobao Marketplace, a unit of Alibaba Group, is China's largest e-commerce website with a consumer focus. An Alibaba spokeswoman confirmed the closure of Lanyou store but declined to elaborate, saying the company "demands merchants run their businesses in accordance with all regulations and policies".

The Chinese government has started taking the import and export of devices like the iPhone and iPad more serious over the last few years. Even individuals who have iPads and iPhones imported for personal use as opposed to business are now required to pay import tax.

Source: Reuters