appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Simpson Cheung

Allegedly aggressive sales tactics and business operations in Hong Kong’s beauty product sector closely mirror the global “Dead Sea sales scams” uncovered years ago, documents on WikiLeaks have shown.
The controversy has prompted calls from experts for the city’s government to strengthen regulation by expanding proposed cooling-off period legislation to cover retail beauty goods.
A check of the whistle-blower website WikiLeaks by the South China Morning Post found that shops and kiosks selling Dead Sea products using allegedly pushy sales tactics had been reported in several countries over the past two decades, affecting customers in the United States, New Zealand, Australia and Europe.
Diplomatic cables released by the website in earlier years shed light on the operation behind the billion-dollar industry, which involves alleged immigration fraud, illegal labour, money laundering and worker exploitation in the United States.
One cable, prepared by former US ambassador to Israel James Cunningham in 2009, revealed that many young Israelis, generally newly released military draftees, worked in the industry on tourist visas or expired work visas, prompting US investigators to crack down.
“The financial incentive is great; post-IDF [Israel Defence Forces] salaries are low and jobs scarce – hence their ‘need’ to find a way to quickly finance their university education and/or onward travels,” the cable read.
Last week, Hong Kong customs officers arrested two staff members from Sayles Retail, the local distributor of the Opatra London skincare brand, following claims of aggressive sales tactics.
The move was made after a woman complained that she was cheated into paying more than HK$60,000 (US$7,700) for products.
Opatra’s London headquarters said it would cooperate fully with any inquiries.

Sayles Retail operates beauty brands in Hong Kong, such as Opatra London and Lux Boutique, which market luxury skincare with some containing Dead Sea salts and minerals. Company search records showed Israeli directors were behind both the local operator and the UK headquarters.
In the cable, Cunningham, who also served as US consul general in Hong Kong between 2005 and 2008, wrote to the secretary of state that many Israelis were well coached for interviews when applying for US visas, lying to officers that they intended to visit family and friends.
Many were in fact hired to sell Dead Sea cosmetics through recruitment websites or word of mouth.
The cable revealed that Dead Sea product companies were usually structured under “parent” companies that bought kiosks at shopping centres across the US and sublet the contract to kiosk managers, who were controlled by regional managers responsible for hiring workers.
Parent companies created a series of “legitimate managerial layers” between themselves and illegal workers.
“Thus, it has been extremely difficult for investigators working to combat Dead Sea fraud,” the cable read, which also identified a key player in the industry holding more than 50 companies.
“Shoppers are besieged by a determined crop of salespeople: young Israelis who man mobile carts and have a no-holds-barred selling style,” Cunningham added.
Another cable, prepared by Wendy Vincent, a fraud prevention manager at the US consulate in Tel Aviv, in 2010, indicated that the embassy suspected there were hundreds of Dead Sea companies and thousands of kiosks across the US, drawing thousands of Israelis into jobs paying US$1,000 to US$3,200 per month.
According to Vincent, Tel Aviv had been investigating visa fraud in the industry since 2007 and realised the same business model had been deployed to sell pillows, toys and even roasted nuts.
In some cases, Israeli workers’ passports were held by employers. They worked 11 hours a day, six days per week, earned only commission and had US$500 deducted from their salaries for living expenses, according to the cables.

Professor Sibylle Heilbrunn, head of the master’s programme in innovation and entrepreneurship management at Kinneret College on the Sea of Galilee in Israel, said that while sellers inflicted harm on customers, they themselves were exploited and exposed to arrest and deportation.
She said such sales tactics were “barely visible” in Israel. The legitimate Dead Sea product industry began in the country in the late 1980s and 1990s, while the kiosk model emerged in the 1990s and 2000s, run by Israeli operators abroad.
According to Heilbrunn, Dead Sea products carried an “exotic” appeal, with unverifiable claims and no baseline reference price – factors exploited by overseas operators.
She added that a large cohort of youth, aged 21 to 23, were discharged from the army every year, supplying a labour force to the industry seeking workers that could tolerate hierarchy and quotas.
Employers sought workers who could live with eight strangers in one flat without unravelling, showed resilience despite constant rejection, could endure 12-hour shifts and obey a chain of command.
In Israel, according to Heilbrunn, only about 10 per cent of the workforce was employed in the high-wage innovative sector, reserved for a small elite group to enter at the age of 18.
The rest earned only half as much. She said Israel was an expensive country where housing, university and post-army trips all came with a steep price tag.
“A young person with no capital … is offered a job that promises tens of thousands of shekels in a few months plus a flight and a place to sleep. It is not mysterious that they take it,” she said.

Roy Ying Fai, senior lecturer of marketing at the Hang Seng University of Hong Kong, who frequently travelled to North America, said he witnessed such aggressive sales tactics more than 10 years ago in the US. He added he had not seen such practices any more, believing authorities had cracked down on the practice.
Ying said he did not know if the same syndicate was behind the Dead Sea products sold in Hong Kong and the US. But from his observation, the mode of operation was slightly different in Hong Kong. Instead of Israelis, locals were hired and trained to deploy similar sales tactics. Some operators still hired expatriates to distribute free samples at the door.
It was understood that local law enforcement agencies intended to look into the Opatra case to see if it involved any illegal workers or overstayers.
But Catherine Yeung Wing-man, an associate professor of marketing at the Chinese University of Hong Kong, said such aggressive sales tactics targeting impressionable customers could occur across any industry or country.
She noted salespeople created an anxious state in customers by pointing out their pores and wrinkles using magnifying mirrors, then offering immediate relief through their products.
They then overwhelmed shoppers with pseudoscientific jargon and lured them into making purchases through artificial urgency, such as time-limited discounts, she added.
Roy Ying said such tactics highlighted a loophole in proposed cooling-off measures for the wellness sector.
He was referring to government proposals for a statutory seven-day cooling-off period and a 14-day refund window for prepaid beauty and fitness contracts. The two-month consultation will end on August 31.

Ying said the government should consider extending the proposed cooling-off period to cover more areas such as retail beauty products.
Yeung agreed that the cooling-off period should be “applied to any product and any environment”, because the psychological underpinnings behind aggressive sales tactics of services and products were the same.
A spokesman for the Commerce and Economic Development Bureau said prepaid consumer contracts for beauty and fitness services accounted for the highest number of complaints.
Beauty products rarely involved prepayments and were usually immediately supplied to customers shortly after payment, which might not fall within the proposed scope of the legislation, he said.
Customs would take decisive enforcement action against aggressive commercial practices, regulated by the Trade Descriptions Ordinance, he added.
The controversy surrounding Opatra started with a video going viral online, which showed a woman crying outside an outlet in New Town Plaza shopping centre, claiming she had been cheated.
Yeung said shopping centres had a responsibility to do more, for example, carrying out due diligence checks before leasing out premises and reviewing tenants’ business operations from time to time.
She said property developers presented their shopping centres as a family-friendly, community-oriented retail ecosystem, a commercial strategy designed to capture habitual foot traffic and maximise long-term profits.
“Having monetised this brand identity as a trusted ‘community partner’, developers face a fundamental commercial contradiction if they were to turn around and claim they were merely passive landlords leasing floor space,” she said, adding that she did not think developers were currently doing so.
Ying agreed and proposed designating an official channel for landlords to report suspected business malpractices to authorities.
In 2014, a kiosk selling Dead Sea cosmetics was evicted from a shopping centre in New Zealand by the mall owner after an elderly woman complained that she was coerced into buying NZ$3,000 worth of wrinkle creams.


3 stray mongrels captured after cyclist dies in suspected dog attack

Nearly 50% rise in drug seizures by Hong Kong customs in first half of year

Barristers dismiss calls for solicitors to gain senior counsel status in Hong Kong

Hong Kong school told to review arrangements after alleged Cantonese video ban

Hong Kong society

How Hong Kong beauty retail tactics echo global Dead Sea sales scams

Illustration: Brian Wang

The closed premises of Opatra London on Russell Street in Causeway Bay. Photo: Nora Tam

Customs arrested two people over coercive sales tactics used by beauty chain Opatra. Photo: Nora Tam

A Lux Boutique outlet at Gateway Arcade in Tsim Sha Tsui, operated by the same local retailer of Opatra London, was closed on Saturday. Photo: Karma Lo

Customers shop for lipstick at a shopping centre in Tsim Sha Tsui. Aggressive sales tactics targeting agreeable customers can be found in any industry, Professor Catherine Yeung has said. Photo: Jelly Tse

Opatra London and Hong Kong distributor suspend local operations after arrests

Opatra London on Russell Street in Causeway Bay, which had opened only months ago, was shut on Sunday. Photo: Nora Tam

More Hong Kong consumers allege coercive beauty sales in wake of Opatra crackdown

The Mineral Boutique has at least five branches in major shopping centres, including one at Festival Walk. Photo: Dickson Lee

Customs officers arrest a 43-year-old man and 25-year-old woman in connection with a local beauty retailer linked to UK brand Opatra London accused of deceptive sales practices on August 19. Photo: Nora Tam

News

Hong Kong

WikiLeaks files reveal pushy sales operations for Dead Sea beauty products have been problematic in several countries for decades


WikiLeaks files reveal pushy sales operations for Dead Sea beauty products have been problematic in several countries for decades.


How Hong Kong beauty retail tactics echo global Dead Sea sales scams

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}WikiLeaks files reveal pushy sales operations for Dead Sea beauty products have been problematic in several countries for decades

WikiLeaks files reveal pushy sales operations for Dead Sea beauty products have been problematic in several countries for decades