Alibaba Spent £103m On Fighting Counterfeits

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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The company said it employs 2,000 staff dedicated to spotting fakes and removed 90 million listings in the run-up to its IPO

Chinese e-commerce leader Alibaba said it has spent more than 1 billion yuan (£103m) fighting counterfeits on its websites from the beginning of 2013 up to November of this year, removing 90 million listings that may have been fake.

The company said at a press conference in Hangzhou last week that it plans to add another 200 staff to the 2,000 employees and 5,400 volunteers currently involved in removing counterfeits.

Alibaba Taobao logo

Reputation

The efforts are part of Alibaba’s plans to polish its reputation, something it invested in heavily ahead of a record-setting $25bn (£16bn) public offering in New York in September. Ahead of that listing, Alibaba said in its IPO prospectus that the trade in counterfeit goods could hamper its ability to win partners in the US.

“We bear a serious responsibility in this fight against counterfeits,” said Alibaba Group chief executive Jonathan Lu in a statement. “(Company chairman) Jack Ma said yesterday – if e-commerce does well in China, that may have little to do with Alibaba Group, but if counterfeits in society are not tackled effectively, it has a lot to do with Alibaba Group.”

The company said it has helped Chinese authorities in more than 1,000 counterfeiting cases this year alone, with the arrest of 400 suspects. Alibaba said it had penalised 131,000 sellers as of 30 September.

The company, which offers marketplaces such as Taobao and Tmall.com for the use of third-party vendors, requires sellers to make deposits guaranteeing the legitimacy of their wares.

Counterfeits ‘prominent’

However, the company has by no means eliminated counterfeits in a country that, along with Hong Kong, was the source of 93 percent of the value of knock-off goods siezed by US customs in the 2013 fiscal year.

Last month, the official State Administration of Industry and Commerce’s (SAIC) investigation into Alibaba’s annual Singles’ Day sales found that more than 10 percent of the goods bought online from retailers were counterfeit or suspicious. Alibaba recorded more than $9bn in sales that day.

China is home to a number of markets known for “prominent and extensive” availability of counterfeits, including Beijing’s Silk Market and Guangdong’s Zengcheng International Jeans Market, according to a February report by the Office of the U.S. Trade Representative.

Alibaba was itself only removed from the US government’s list of markets “notorious” for intellectual property infringement in 2012.

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