She became aware of it when someone spotted the photo and messaged her on Facebook.
Mrs Paewai, who also has 5- and 3-year-old sons, said she contacted the seller on AliExpress and asked them to take the photos down.
"They ended up taking it off but since then so many more have popped up. I did an image search and it came up with 113 links to AliExpress.
"I literally just gave up, because one would get taken down and then 50 more would pop up."
She said five different photos of her son have been used so far on AliExpress, and so have two home decor photos she posted.
It made her "sick to [her] stomach" and was made worse because her son was wearing a beanie with his name on it in one of the photos, she said.
"It's heartbreaking when you see people take advantage of photographs like that. It's sickening really."
Mrs Paewai said she took pride in buying baby products from other mothers who had set up their own business.
The panda onesie, from an overseas brand, was bought from a Kiwi mother who started her business from home.
That Mrs Paewai's photos were used to rip off that woman's company was "pretty wrong", she said.
She had talked to at least five other people who had had the same experience, including two with businesses who'd had their products ripped off.
Mother of two Paula Ward came across the issue and created a Facebook group called "Take a Stand: We're against intellectual property theft".
She said she sympathised with those whose photos had been taken.
"Because I have two kids, I dress them in these clothes, I share it on Instagram and I just feel it's actually probably only a matter of time before someone goes, 'Oh, look, there's your kid'. I don't want that."
Mrs Ward, who has a 3-year-old son and 10-month-old daughter, said it would be "so upsetting".
"I feel for these poor mums ... and they all don't know what to do."
She said the pictures were not targeted because they featured a cute baby.
"They don't want that. It's if you're unlucky enough that your child is wearing the piece of clothing that they then want to rip off."
Mrs Ward said companies advertising on AliExpress were "taking advantage" of the growing number of mum communities on social media that were sharing photos and ideas and creating small businesses.
Attempts to reach AliExpress yesterday were unsuccessful.
However, a press release issued by the company last year said it had strengthened co-operation with the International Publishers Copyright Protection Coalition in China to combat online copyright violations.
It was "working to identify product listings of potentially infringing products offered for sale by third parties" on AliExpress and would take appropriate actions to remove such infringing products.
