Hibox: How Influencer-Promoted Mystery Box App Turned Into A Money Trap

Lucky Jaiswal, a student from Jaipur, was scrolling through YouTube when he stumbled upon something intriguing. Popular influencers like Elvish Yadav and Abhishek Malhan, known as Fukra Insaan, were raving about an app called Hibox. The promise? Mystery boxes containing items worth up to 1,00,000 rupees all guaranteed to be "100% authentic." Intrigued, Jaiswal decided to try out the app.

While he initially managed to earn good money, eventually he could not withdraw that money which reflected in his digital wallet. The amount was to the tune of 50,000 rupees.

Jaiswal explained in detail how the Hibox app worked, starting with the allure of its mystery boxes. He said that the main draw for users was the promise of receiving items significantly more valuable than the price they paid.

"The app offered boxes priced between Rs 300 and over a lakh, promising contents worth the same amount or even more, which made it hard to resist," he said. The possibility of discovering high-value items only increased the excitement for users like Jaiswal.

Jaiswal wasn't alone. Across India, thousands were drawn into Hibox's allure. The app, launched in July 2023, exploded in popularity, amassing over half a million downloads on Google Play Store in just three months.

The concept was simple yet captivating. Users could purchase mystery boxes, revealing anything from mobile covers to iPads. "Sometimes, it would be something small like mobile covers, but other times, you could get electronics like a tablet or even an iPad," Jaiswal said, recalling the thrill of unboxing. The variety and unpredictability of the contents kept users engaged and hopeful for a big payout.

But Hibox's real hook was its resale feature. "The platform promised that you could successfully resell your items within 24 hours, giving users a chance to recover their money or even make a profit beyond their initial investment," Jaiswal added. This created an illusion of risk-free profit.

Jaiswal began with an investment of Rs 300 on his first mystery box and resold it for Rs 315. Encouraged by this minor profit, he reinvested Rs 300 to buy another box, gradually working his way up to more expensive boxes. "On reselling, they offered daily returns of 1 percent and monthly returns of 30 percent, with a block duration of 24 hours,” he explained.

However, two months ago, Jaiswal, along with many other users, found that they were unable to withdraw the money they had accumulated in the app. "Suddenly, it became impossible to transfer the funds from the Hibox wallet to our bank accounts or UPIs," he said, describing the frustration of not being able to access his earnings.

In the first week of July, Hibox started delaying payments to participants, citing various reasons such as technical glitches, legal issues, and GST concerns. In August, the company announced on X that withdrawals would soon resume and requested users not to tag creators and employees regarding these withdrawals.

“Specifically Abhishek Malhan and our employees are not involved in any way, so please refrain from contacting them,” the post read.

Social Media Influencers Under Scanner

Similar to Jaiswal, Khandelwal had just invested the initial Rs. 300 in the app and never actually purchased any mystery boxes; instead, he would immediately resell them for profit. “Most users did the same—reselling without buying, just to make a profit and use that money to purchase the next mystery box,” he explained.

Khandelwal, an accountant from Rajasthan, discovered the app through social media. "It was hugely popular among my peers, especially with its 'easy money earning' feature promoted by famous YouTubers," he said.

Now, as the app has been embroiled in controversy, the accountant believes these influencers should be held accountable as well.

The dream had turned into a nightmare. In October, Delhi Police received over 127 complaints from disillusioned users who claimed that they invested money in the app based on promotions by their favourite social media influencers and YouTubers.

An investigation was launched, leading to the arrest of Sivaram Jayaraman, director of Sutrulla Xpress, the company behind Hibox in India. Police seized Rs. 18 crore from four of his accounts.

The app's popularity soared, buoyed by aggressive marketing. Hibox partnered with SpiceJet Airlines, offering passengers "an immersive shopping experience". They plastered their ads across 1,000 Delhi Transport Corporation buses and 12,000 auto-rickshaws in Delhi NCR. But their most potent strategy was influencer marketing.

Celebrities and YouTubers like Rhea Chakraborty, Tejaswi Prakash, Saurav Joshi, and Bharti Singh promoted Hibox on their social media accounts. One sponsored ad on Instagram featured an influencer unboxing a Rs 1 lakh mystery box, receiving a Samsung Galaxy S23, and claiming potential earnings of Rs 1.36 lakh within a month through reselling.

For a while, it seemed too good to be true. And it was.

Upon reviewing the Meta Ad Library, Decode discovered that Hibox had been running numerous sponsored ads on Instagram until July, either in collaboration with influencers or on pages dedicated solely to promoting Hibox.

The app, which was launched in July 2023, reportedly surpassed the milestone of half a million downloads on Google Play Store within a three-month span. Currently, the app is not available for download.

Hibox Under Investigation for Fraud

Hibox is a London-based global company “specialising in mystery box e-commerce”. It entered the Indian market in the second quarter of 2023 and in the same year had set up its Vietnam branch. Hibox in India is owned by Sutrulla Xpress.

Sutrulla Xpress Private Limited (OPC) is a private, non-governmental company that was incorporated in November 2016 and is registered in Chennai. The term "OPC" stands for One Person Company, which indicates that the company has only one shareholder or owner.

In addition to arresting the director of Sutrulla Xpress, the police are investigating the roles of Easebuzz and PhonePe, as these platforms served as merchant accounts for the fraudsters operating Hibox. Authorities indicated that these apps have not complied with the guidelines set forth by the Reserve Bank of India (RBI).

However, in a statement, Easebuzz said it had proactively blocked the merchant from being probed by the police in July 2024 prior to the investigation by authorities.

As authorities untangle this digital Ponzi scheme, it leaves behind a trail of frustrated users and a stark reminder: on the internet, if something seems too good to be true, it probably is.