Chile’s “Chinese Malls” Reveal a Looming Crisis in Informal Trade – And What It Means for Consumers

Nearly half (45.1%) of the goods sold in Chile’s rapidly expanding “Chinese malls” are suspected of being counterfeit, according to a new report from the National Chamber of Commerce (CNC). This isn’t just a matter of cheap knock-offs; it’s a symptom of a deeply embedded ecosystem of informality that’s eroding consumer trust, undermining legitimate businesses, and posing potential risks to public health and safety. The CNC’s “Observation of Chinese Malls 2025” paints a concerning picture of a retail landscape operating in a legal gray area, and signals a need for urgent action.

The Scale of the Problem: Beyond Counterfeit Goods

The CNC’s investigation, conducted across 62 malls primarily in the Metropolitan region, revealed a widespread pattern of “incomplete formality.” While many businesses accept card payments and display a tax ID (RUT), a shockingly low 38.7% prominently display a commercial license. Even those that do often present only laminated copies lacking official seals, raising serious questions about their validity. This isn’t simply about paperwork; it’s about a systemic lack of accountability.

A Hotbed for Uncertified Products

The consequences of this informality extend far beyond licensing issues. The report highlights a significant presence of uncertified and potentially dangerous products. Consider these figures: 91.9% of stores sell toys, but less than half (49%) provide information in Spanish. Cosmetics, found in 93.5% of premises, are only ISP-certified in 67% of cases. Food products, cleaning supplies, and even pet food frequently lack the necessary health resolutions and safety seals. This poses a direct threat to Chilean consumers, who may be unknowingly exposed to substandard or harmful goods.

Tax Evasion and the Erosion of Consumer Rights

The lack of formal registration and receipt issuance is a major concern. While 93.5% of transactions included some form of receipt, a troubling 6.5% did not issue one at all. Even more alarming, when consumers did request a receipt, it was only delivered in roughly one-third of cases. This behavior directly impacts tax collection – the CNC estimates significant revenue losses – and leaves consumers vulnerable, stripping them of the ability to exercise their warranty rights or seek redress for faulty products. The average cash purchase was $850, and $1,143 by card, demonstrating substantial economic activity operating outside of full regulatory oversight.

The Rise of the “Hybrid Model” and Institutional Weakness

The CNC’s analysis points to a “hybrid model” where businesses strategically present a facade of legitimacy while simultaneously engaging in informal practices. This isn’t accidental; it’s a calculated response to a lack of coordinated institutional oversight. The report explicitly calls for greater collaboration between municipalities, the Internal Revenue Service (SII), the National Consumer Service (Sernac), Customs, and health authorities. Without a unified and proactive approach, the problem will only worsen.

Looking Ahead: The Potential for a Two-Tiered Market

The proliferation of these malls isn’t slowing down. If left unchecked, we could see the emergence of a two-tiered retail market in Chile: a formal sector adhering to regulations and a sprawling informal sector operating with impunity. This would not only disadvantage legitimate businesses but also create a breeding ground for illicit trade and potentially fund other criminal activities. The current situation isn’t sustainable, and the CNC’s report serves as a critical wake-up call.

The Impact on Brand Reputation and Consumer Trust

The widespread availability of counterfeit goods also has a significant impact on brand reputation. Consumers who unknowingly purchase fake products may lose trust in established brands, leading to long-term damage. This underscores the need for brands to actively monitor the market and collaborate with authorities to combat counterfeiting. A recent report by the OECD highlights the global economic impact of counterfeit trade, estimating it to be worth hundreds of billions of dollars annually.

The CNC’s findings are a stark reminder that economic growth cannot come at the expense of consumer protection and fair competition. Strengthening institutional oversight, simplifying regulatory procedures, and increasing inspection frequency are essential steps to address this growing challenge. The future of Chilean retail – and the safety of its consumers – depends on it.

What steps do you think are most crucial to address the issue of informality in Chile’s “Chinese malls”? Share your thoughts in the comments below!