How this fake Alibaba ponzi scammed thousands in Indonesia

Two years ago, we wrote about Alimama, Alibaba Group’s advertising platform which might be the biggest contributor to the group’s revenue. Alimama helps online businesses to do better marketing by tracking users across Alibaba’s multitude of digital platforms— Taobao, Tmall, AliPay, UCWeb, AliExpress, GaoDeMap – developing a deeper understanding of user’ journey and buying behaviour.

While even most people in China would have no idea about what Alimama is, recently in Indonesia, Alimama drew public attention due to a ponzi scam. We have yet to know how much this fake Alimama grossed from scamming people in Indonesia, but from this picture alone we could tell that it’s not a small amount of money. The total money lost, just from this small group, is around US$10,781.

What’s happening?

Most of the victims know this fake Alimama from their friends. These “friends” will ask them to download the app from a very bizarre website, register their account, and begin to deposit their money into the app.

This is how the app looks like.

This fake Alimama app offers easy money to its users by only pretending to buy goods. The fake Alimama website is certainly different from the original Alimama. The fake website is at almm.qdhtml.net, totally untrustworthy and bizarre for an official web address, right?

So how do people get money from the app?

• Register on the fake Alimama website.
• Download the fake Alimama app from the website
• Top up or deposit money
• After topping up, users order goods on various e-commerce sites – this is also a fake activity. There are Lazada, Amazon, Tokopedia, Taobao and T-mall in the list.
• For every purchase, users get a commission of 0.2% of the price of the goods they pretend to purchase
• In total, users earn at most 2% a day from the top-up amount

The purchasing is a fake activity because they won’t deduct users money for buying goods. This fake Alimama told the users that this “purchasing” is to boost the shop’s rating.

A Ponzi Scam

We conclude that this fake Alimama is a ponzi scam, exactly the same scheme as JD Union (certainly using JD name in order to get users), Memiles, and other ponzi businesses that have been in Indonesia.

The profit that the users get comes from the money of the new users. New users will get money from more recent users. And this chain continues.

When there were no new users, the fake Alimama disbanded. Thousands of people who have already registered may lose money partially or completely. As of now, there’s no update on where the fake Alimama’s higher ups are, they have shutted down all the communications channels (mainly through WhatsApp), and rumours said that they have moved to Vietnam for the next target.

From these fake Alimama lessons we learned that financial literacy of Indoenesian people, mainly those in middle income class, is far from decent. It is a serious problem that they actually have access to the internet, yet they couldn’t verify whether this business is a scam or not. 

It is also clear that the Alimama fake application is not registered in App Store or Play Store, the website is too bizarre to trust, and of course, it’s not registered in Otoritas Jasa Keuangan (OJK – the Financial Services Authority of Indonesia).

While it’s actually easy to check these parameters and it’s just a single tap away to get a legal and trustworthy investment application, these poor people got scammed anyway. It’s a huge homework for the society and of course, OJK in this case.

Other than that, in case anybody needed, the fake Alimama case in Indonesia is proof that word-of-mouth marketing is still a strong technique that works well in Indonesian society.