Alibaba’s Massive Counterfeit Problem
Amy | On 10, Nov 2015
And so, the world’s biggest online retailer courses with an extraordinary torrent of counterfeit as well as counterfeit products. In this case neither the big brands, the Chinese government nor U.S. pressure can do much about it. But then, Mr. Jack Ma is the most powerful businessman in Asia, and so he can. Nevertheless shutting down the fakes would undermine his Alibaba Kingdom.
The man who oversees the world’s largest online retailer and whom Forbes rank as the 22nd most powerful person in the world, and he doesn’t really lawyers. Especially, when it comes to the ones that are attacking the $200 billion kingdom he’s built. Some quite fancy New York lawyers have sued him for trademark infringement and for trafficking in counterfeits on behalf of their client, Kering, the French extravagance products company that owns Gucci and Yves Saint Laurent. He insists that there is no chance to settle down.
Jack Ma stated:
“I would rather lose the case, lose money. But we would gain our dignity and respect.”
In the eyes of thousands of small Chinese entrepreneurs who have made a living on Alibaba’s online bazaar known as Taobao, the above statement is true. To Ma, these sellers are his lifeblood, as these Chinese ratail sites handle five times the volume of eBay- last year $394 billion of everything.
The Alibaba juggernaut has been constructed to a substantial degree on illegal, counterfeit goods.
The fraud is enormous – Taobao bids millions of suspected goods for sale, whatever you can think of, be it handbags, auto parts, sportswear or jewellery. The listings of Taobao, when the word “Gucci” was searched and when the chosen price was set, a range of under 300 Yaun, or even less than $50. 30,000 results came out with prices below the real Gucci brand. Sellers have confirmed (in online chats with Forbes) that they hire factories to produce these wares using the original designs, with slight changes. For instance, the letter “G” in “Gucci” is replaced with “D” on the handbags.
“NetNames, a firm that helps brands fight online counterfeits, says that its clients believe as much as 80% of the merchandise sold as theirs on Taobao is fake. That’s backed up by Dan McKinnon, head of global brand protection at sneakermaker New Balance. Since the Boston company has no authorized dealers on Taobao, McKinnon figures that at least 80% of the supposed New Balance products sold over the site are counterfeit or suspicious. Alibaba, for its part, won’t hazard an estimate.” – Forbes
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