The top sellers fell into a trap, and the hot-selling products received one-star bad reviews

eufy was exposed by foreign users for security vulnerabilities, including uploading user data to the cloud without permission, which broke the high security setting of its products. Foreign media followed up with reports, and eufy became the target of public criticism.

Affected by this, multiple eufy products on Amazon received one-star bad reviews, and some users even said they would remove all eufy products from their homes, ushering in a crisis of trust.

Anker is not the only one. A month ago, the home furnishing brand Levo was exposed for having hidden cameras in its products, but Levo's chairman thought that netizens were "making a fuss over nothing", which triggered heated public debate and eventually the related products were removed from the shelves.

The failures of big sellers have served as a reminder to sellers. Currently, smart home and 3C electronics are both popular tracks for cross-border exports, and product safety is of great importance. Privacy-related issues are the users’ weak links and cannot be touched.

Anker sub-brand in crisis

In the first half of this year, Anker Smart's innovation category achieved revenue of 1.668 billion yuan. This category includes eufy smart home, Nebula laser smart projection products and other innovative product series.

eufy has two major product lines. Among them, eufy Security focuses on smart home security systems, building a home security product matrix through products such as smart video doorbells, smart door locks, and smart wireless security cameras.

In the competition with similar products, one of the major selling points of eufy Security is that data is only stored locally, without the risk of leakage. But now this flag has fallen.

Paul Moore, a security consultant, bought a set of eufy dual-camera doorbells, but found some problems after using them. He posted a demonstration video on Twitter saying that the product had security vulnerabilities. The video mainly mentioned two points:

1. When cloud storage is disabled and local storage only is enabled, the eufy security camera will still send some data to the cloud, such as thumbnails of surveillance videos; even if the relevant surveillance videos are deleted in the eufy application, they can still be accessed in the cloud.

2. Connect VLC media player to the unique address of eufy cloud server, and you can watch the camera's shooting content online without any encryption and authentication.

Anker has accumulated a large number of fans overseas, and the topic of privacy is very sensitive, so this analysis video attracted considerable attention as soon as it was released.

eufy responded to the first question, saying that this was uploading event lists and thumbnails to AWS, but the system's security mechanism restricted the relevant URLs. Only when the account was logged in could the individual access the data within a limited time, and there would be no leakage.

But in response to the second question and media inquiries, Anker senior public relations manager Brett White flatly denied, "I can confirm that it is not possible to start streaming and watch real-time recordings using third-party players such as VLC."

The Verge, a technology website, disagrees with this statement. He said that he repeatedly watched the live video of his two eufy cameras using the same VLC player across the United States, proving that Anker has a way to bypass encryption and access these supposedly secure cameras through the cloud.

As more and more questions and reports are raised, consumer confidence is beginning to waver. "If I see this news and I have this camera at home, I will immediately turn it off and not use it anymore because I don't know who will see (these images)," said one respondent.

On Amazon's US and European sites, eufy-related products have been given one-star negative reviews one after another. One review even said, "It is a blatant lie that eufy data is only stored locally."

“False advertising. Contrary to what they claim, eufy actually stores your data on their servers.”

"Having used it for a few years, the product itself is fine, but just discovered that all eufy cameras can be accessed over the web without encryption (even though nothing is stored in the cloud)... Now looking for new cameras, we have other equipment in use and have to replace everything."

Another buyer expressed shock. “I have removed and disposed of several cameras. After the lies and security breaches, no products from this company will ever come into my home again.”

Before this, most of the comments on the relevant listings praised the product for its easy installation, clear picture quality, long battery life, no need for subscription storage fees, and good after-sales service.

eufy "error correction"

As the incident continued to ferment, Anker later stated in a statement that it would take the following two measures:

1. We are revising the push notification options language in the eufy Security app to clearly detail that push notifications with thumbnails require preview images, which will be temporarily saved in the cloud.

2. We will more clearly explain the use of Cloud Push Notifications in our consumer-facing marketing materials.

Soon after, eufy updated the "Eufy Security" app, adding a paragraph of text in the settings. It explained that thumbnails of eufy security cameras that can be used for push notifications are temporarily stored on the company's cloud servers, and users can choose to receive plain text notifications (entirely stored locally) or receive push notifications with thumbnails through the cloud service.

In fact, it is reasonable for security camera products to store images in the cloud and send photo thumbnail push notifications to mobile phones. However, foreign media believe that the most fatal thing is not that eufy uploads data to the cloud, but that eufy has never disclosed this to customers. Instead, it emphasizes that customer data is stored locally and the privacy of the data, and uses it as a major selling point to attract users, which caused such a violent reaction when the news was exposed.

When Anker tried to enter the smart security field in 2018, it conducted a market survey to find a breakthrough and found that 73% of consumers were worried about their privacy and data security. Privacy protection and no monthly fees were two clear demand points. Therefore, "ultimate security" became one of the three characteristics of Eufy smart security products and also became its brand label.

Eufy promises that if cloud storage is turned off, the data captured by the camera will always be stored locally; the data is encrypted using military-grade security, and no one except the user can see the video.

(Contents of some eufy products)

Eufy's entry point is very clever. According to Anker Innovations' user survey in 2021, more than 60% of users chose its products because of the lack of monthly fees and privacy protection. Sales data at the end of the year showed that the Eufy brand ranked first in the North American market and second in the European market.

But after the crisis of trust emerged, this setting began to backfire. After this adjustment, the eufy brand crisis may gradually calm down.

This is not the first time that eufy has had information security issues. In May last year, some users discovered a bug in its system that allowed them to see and control the real-time images captured by eufy devices in other users' homes, as well as access the videos stored in the devices and other users' email addresses. Afterwards, eufy apologized for the failure and quickly completed the system repair.

Due to the large number of product categories and rapid product updates, Anker Innovations has invested heavily in research and development for a long time. From January to September 2022, Anker Innovations invested 699 million yuan in research and development, an increase of 40.1% over the same period last year; accounting for 7.33% of operating income, which is high in the industry.

This year, Anker Smart launched several new products in the innovative category, including the eufy Security dual-camera doorbell launched in the first half of the year, and the eufy Security 4k wireless security camera eufycam 3, which was launched around security scenarios and has achieved ultra-long battery life. It hopes to create a high-quality local security smart ecosystem.

In the past two years, Anker has attached great importance to smart products.

In May this year , Anker made a new overseas investment, investing 100% in Suzhou Youfei Intelligent Technology Co., Ltd. The company was established on May 23 with a registered capital of 1 million yuan. Its business scope includes the research and development of intelligent robots and the sales of intelligent home consumer devices.

Not long ago, Anker Innovations established a new company in Shenzhen. The legal representative of Shenzhen Anker Innovations Technology Co., Ltd. is Huang Simin. The registered capital is RMB 1 million. The business scope includes home appliance research and development, electronic product sales, and smart home consumer equipment sales.

At the end of October, Anker Innovations established a new wholly-owned subsidiary, Shenzhen Anker Zhicai Technology Co., Ltd., whose business scope includes intelligent robot research and development, 3D printing services, etc.

Although it has stepped on a consumer minefield this time, Anker will do even better in this field as it continues to increase its investment in smart products.

Before Anker, another cross-border big seller , Levo, also had issues with user privacy.

Suspected of spying on user privacy, Levo products have been removed from shelves

Not long ago, a lifting table produced by Levo was pushed to the forefront because of a hidden camera, sparking heated discussions among netizens.

A netizen complained on a relevant platform that there was a hidden camera in the digital screen of the Levo A9 smart lift table he purchased online, but there was no need for a camera in the product itself, implying that Levo products were suspected of peeping into user privacy.

It is worth noting that the function of the camera is not explained in the product introduction of Leckey, and the official introduction does not mention the function of the camera. Since it is not mentioned and has no function, the significance of the existence of this camera has aroused doubts among netizens. For a while, the hidden camera may violate the privacy of consumers and make netizens uneasy.

After the incident, Levo admitted the existence of the camera, but said that recording would not violate user privacy.

In a statement, Leckey said that the built-in camera is used for the contactless heart rate detection function developed by the company, but due to the high technical difficulty of the software for this function, it is currently under further development and improvement. Currently, this function has been turned off, so in fact, the camera is idle and there is no problem of stealing user privacy.

Products such as mobile phones that have cameras will be indicated, but Levo's lifting table products do not have this indication, and Levo has not given a reasonable explanation for this.

In response to netizens' questions, Lechuang founder and chairman Xiang Lehong also stressed that the product's camera does not have the problem of snooping privacy, and pointed out that netizens are making a fuss. Xiang Lehong's original words were: "Lechuang's height adjustable table is a smart product. What's wrong with a smart product having a camera? Make a fuss!"

Xiang Lehong's words made netizens say: It's too embarrassing! You know, privacy issues have always been the most concerned issue for users. Lege's reply is indeed evasive, no wonder netizens don't buy it!

Behind a camera is actually a big issue related to everyone's privacy and security! Later, Lechuang said that out of caution, the company has removed the product from the shelves.

Leckey also expressed its apologies for the inconvenience caused to consumers by the camera. In the future, when the company officially provides this service function to consumers, it will further explain it to consumers in the manual and obtain their consent to provide paid services on a voluntary basis.

Informing consumers and explaining, this is the right attitude! It is reported that Leckey Ergonomics Technology Co., Ltd. was established in 2002 and is headquartered in Ningbo, Zhejiang. It was listed on the Shenzhen Stock Exchange Growth Enterprise Market on December 1, 2017. It is the first A-share listed company in the big health ergonomics industry and the first cross-border e-commerce stock listed through IPO.

As the concept of healthy office becomes more popular, Lechuang has experienced rapid development, and the company's revenue and profits have also increased simultaneously. However, Lechuang's net profit has been declining since the beginning of this year.

In the first three quarters of this year, Lechuang's revenue was 2.312 billion yuan, a year-on-year increase of 10.10%; the net profit attributable to shareholders of the listed company was 158 million yuan, a year-on-year increase of 28.12%, and the net profit attributable to shareholders of the listed company after deducting non-recurring items was 65.8831 million yuan, a year-on-year decrease of 31.80%. Last year, Lechuang achieved a net profit attributable to shareholders of 109 million yuan after deducting non-recurring items, a year-on-year decrease of 40.81%. The company has a problem of increasing revenue but not profits.

The reasons given by Lechuang for the decline in profits include various high costs, large investment in self-built overseas warehouses, and excessive investment in domestic marketing. This year, Lechuang put a lot of building advertisements, and the slogan "Straight for this life" made some people disgusted. For a good company, the important core competitiveness should still be products.

Product privacy issues are no small matter, and all companies, including Leckey, must not be careless. This time, Anker's products also fell into this trap. For sellers in the cross-border e-commerce industry, the fact that both Anker and Leckey, two leading companies, have such problems has sounded a wake-up call for similar sellers.

Anker's cameras and Levo's lifting tables, to some extent, belong to the same home category. With the rapid development of the smart home industry, more novel, functional and intelligent products have emerged. It is inevitable that some products will use cameras to achieve more intelligent use effects.

Some categories such as smart home products and electronic equipment are doing well for cross-border sellers. However, cases where big sellers have fallen into traps tell sellers to remember to protect consumer privacy and clearly inform consumers of relevant information.

The loss exceeded 10 million, and product safety issues cannot be ignored

For cross-border sellers, the issue of protecting consumer privacy may involve a limited range of sellers, while the issue directly related to more sellers is product safety. Product safety-related issues have caused many sellers’ products to be removed from the shelves, and they have even been sued by buyers.

In June this year , Zhejiang Yongqiang's wholly-owned subsidiary "American Shangweila" decided to recall a 10-foot solar light umbrella in the United States and Canada. The related costs and losses that may be caused by the recall are estimated to be between 10 million and 20 million US dollars.

The recalled product is a 10-foot solar light umbrella produced and sold from December 2020 to May 2022. A total of 447,200 units of this product were exported to the United States and Canadian markets.

The reason for the recall was that there were problems with product safety, which posed a risk of spontaneous combustion or fire, because the lithium-ion batteries in the solar panel components of this product were partially overcharged during use or charging. At that time, a total of six similar complaints had been received.

Zhejiang Yongqiang also issued an announcement stating that the company and its subsidiaries will bear the relevant expenses and costs of the recall. In response to the losses that may be caused by the recall, Zhejiang Yongqiang's holding subsidiary Ningbo Yize Daily Necessities Co., Ltd. expects to set aside US$15 million in related losses in the first half of 2022, which is expected to have a certain impact on the operating performance of Zhejiang Yongqiang and its subsidiaries in this period.

The company will actively communicate with customers and consumers to minimize negative impacts, and will also actively communicate with suppliers to minimize the economic losses caused by this product recall. The company will take this as a warning, refine and strengthen the control of suppliers, further improve the quality management system, and ensure product quality.

In the cross-border e-commerce circle, there are still many recalls and losses caused by product quality and safety issues. Many sellers have suffered losses in this regard. This year alone, there are many products that have been taken off the shelves due to product safety issues.

About two months ago, there was news that a male-to-male extension cord product sold on Amazon was warned by the U.S. Consumer Product Safety Commission because it did not meet the standards of the National Electrical Code (NEC) of the United States and could cause risks of electric shock, fire and carbon monoxide poisoning during use. This extension cord product has multiple brands, colors and lengths sold on the Amazon platform. After being warned, an Amazon spokesperson said that the products involved in the CPSC announcement have been removed from the shelves.

In early September this year , the British consumer charity Electrical Safety First found in an investigation that Amazon, eBay, Wish and other platforms were selling non-compliant electric bicycle chargers. These chargers are incompatible with the lithium-ion batteries in electric bicycles during use, increasing the risk of internal battery failure, which can cause fires. Electrical Safety First found a total of 59 non-compliant products on Amazon, eBay, Wish and other platforms, and later all the listings of these products were removed from the platforms.

In July, the UK Office of Product Safety and Standards announced the recall of a number of children's products sold on e-commerce websites such as Amazon and eBay. The recalled products were all made in China, including toys and toiletries. One of the Huggy Wuggy plush toys was recalled because the stitching was not tight, and a small amount of stuffing might be exposed when children used it, which could cause a choking risk if swallowed by mistake. The product was subsequently removed by Amazon.

In June, the U.S. Consumer Product Safety Commission announced a recall of WarmWave and Hunter ceramic tower heaters because the heater cords and plugs could overheat during use, posing a fire hazard. Such products have been sold on Amazon, eBay and Home Depot since 2013.

Data shows that in the first quarter of this year, more than 900 million products were recalled in the US market , setting a record high in ten years. Every year, the property losses caused by product safety issues in the US exceed $1 trillion.

Europe and the United States have very strict supervision on product safety. Once a potential safety hazard is discovered, the product will be recalled and removed from the shelves immediately. In serious cases, legal liability will be pursued. User privacy is also a sensitive issue that consumers will strongly condemn, and it cannot be ignored. Cross-border sellers must ensure product quality when going overseas.

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