Alibaba Under Fire From Global Product Brands Over Counterfeits
15 Juni 2016 - 6:07PM
Dow Jones News
By Kathy Chu
Alibaba Group Holding Ltd. is coming under fire from global
brands for rampant counterfeits on its shopping platforms, after
co-founder Jack Ma cast the Chinese e-commerce giant as the global
leader in the battle against fake goods.
Alibaba is the "world's leading fighter on counterfeits," Mr. Ma
said at an investor conference on Tuesday, noting that the company
has technology to track down sellers and buyers of counterfeits on
its platforms. "We can solve the (fake) problem better than any
government, any organization, any person in the world."
Mr. Ma said that part of the problem is that counterfeiters are
increasingly taking to the internet to distribute their fake goods,
which can be "better quality" and offer cheaper prices than
authentic branded goods.
The remarks are rankling global brands, which complain that
counterfeit goods remain a significant problem on Alibaba's sites
despite years of promises by the e-commerce company to crack down
on sellers of infringing goods. NetNames, which tracks counterfeits
online for brands such as Inditex and Billabong, said on Wednesday
that generally the clients it represents estimate 20% to 80% of the
branded goods on Alibaba's biggest China marketplace Taobao are
fakes.
"For Jack Ma to say what he did requires both hubris and
chutzpah," said Bharat Dube, chief executive of Strategic IP
Information, which works with brands including L'Occitane en
Provence to remove counterfeits online. "What world is he living
in?"
Mr. Dube called Alibaba's efforts to address counterfeits thus
far "superficial," and said the e-commerce giant could do a much
better job of ferreting out fakes on its platforms.
Alibaba has said it would spare no expense in fighting
counterfeits. An Alibaba spokesman said the NetNames estimate of
fakes is a "wild, inaccurate guess made by a self-interested party.
There is no methodology to support a claim like this."
The latest controversy comes a month after a prominent
anticounterfeiting group, the International Anticounterfeiting
Coalition, suspended a newly created category under which Alibaba
was admitted as a member, following questions from brands about
Alibaba's sincerity in fighting fakes. Fashion brand Michael Kors,
in a letter to the IACC board, said that the group's admission of
Alibaba provides "cover to our most dangerous and damaging
adversary."
As Chinese authorities get ready to scrutinize fake goods
online, Alibaba Group has promised wholesale changes to how it
deals with infringing products, including shifting the burden of
proof to sellers on its platforms to show that their goods are
authentic.
Mr. Ma said that Alibaba has more than 2,000 people working to
rid its platforms of counterfeit goods, but the substantial size of
the platforms makes the task challenging. In the fiscal year ended
March 31, Alibaba's China marketplaces handled $485 billion in
merchandise volume, which analysts estimate is more than e-commerce
sites Amazon.com and eBay combined.
"Brands are frustrated that Jack Ma and others are standing up
and saying that they're investing all this money, but they don't
see an impact," said Haydn Simpson, commercial director at
NetNames, the counterfeit tracker.
Some analysts also question how much of Alibaba's volume comes
from fake-goods sales or fake transactions, which involve sellers
paying people to place fictitious orders to boost their standing on
Alibaba's site. The concern is that such questionable transactions
could drive customer traffic that in turn could profit Alibaba.
Alibaba has said that it uses sophisticated tools to identify
and exclude fake transactions. Mr. Ma, at the investors'
conference, also said the company's business could be hurt rather
than helped by fake-goods sales. "Every fake product we sell, we
are losing five customers," he said. "We are the victims of that."
He didn't explain his reasoning for that statement.
--Eva Dou contributed to this article
(END) Dow Jones Newswires
June 15, 2016 11:52 ET (15:52 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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