Alibaba, the world’s largest e-commerce company, has once again found itself the target of criticism over its anti-counterfeiting measures. On Friday, the American Apparel & Footwear Association (AAFA), announced that it had sent a letter to Alibaba’s executive chairman, Jack Ma, asking that Alibaba “begin addressing counterfeits in a manner that is transparent, comprehensible, and fast.”
AAFA President Juanita Duggan stated that she was writing the letter after “years of unproductive conversations with the Alibaba Group”. She asked that Alibaba remove counterfeits quickly at the request of certified brands and that “the process contain four critical elements: easy brand certification, brand-controlled ‘take-downs’, brand-approved sales, and a transparent verification process with results made public.”
The spotlight on Alibaba has intensified in recent months with the announcement in May that Gucci had filed a lawsuit in New York against the company claiming that Alibaba “provides the marketplace advertising and other essential services necessary for counterfeiters to sell their counterfeit products to customers in the United States”. In response, Alibaba’s security chief asked the brand not to spend its money on lawsuits but instead to use it to assist Alibaba in fighting fakes.
“I strongly believe that spending money on lawsuits could result in a completely different outcome than cooperating with us,” the head of security and anti-counterfeiting said in an interview with Reuters. The company already employs over 2000 staff and spent over 100 million Yuan fighting fake goods in the last year but it’s an uphill struggle for Alibaba. Jack Ma has previously referred to the counterfeit goods industry infiltrating his company as a ‘cancer’.
Despite Alibaba’s claims that it is doing everything in its power to fight fakes, the Chinese government don’t agree. In a report released earlier this year by the State Administration of Industry and Commerce (SAIC), Alibaba was accused of being ‘far too lax’ and failing to adequately police its market place. Chinese regulators this month launched a five-month campaign targeting counterfeits and other inferior products sold online. SAIC said that the initiative to strengthen the regulation of online trading sites, known as Red Shield Network Sword, will run until the end of November. The regulator is monitoring and supervising the rules governing e-commerce sites over this period in a bid to crack down on fakes.
Will industry and government pressure force Alibaba to change its ways? More to come on this one!