I just read a good article in this week’s Week In China on the topic of counterfeit goods.
It starts by reminding us of the regular accusations of big brands against Alibaba.
Last May, brands led by Michael Kors, Gucci and Tiffany resigned their International Anti-Counterfeiting Coalition memberships after the board proposed Alibaba for membership, forcing that body to back down.
Alibaba’s boss, Jack Ma, responded to this and tried to use it for a specific purpose.
Ma says the criticism is unfair and he flagged Alibaba’s anti-counterfeiting efforts in a Sina Weibo post timed to coincide with the annual National People’s Congress (NPC), which concluded last week. All the same, it was his strongest acknowledgement yet that Alibaba has a problem with fakes.
His message was clear. Alibaba cannot deal with the challenge alone and it wants the government to draft laws which make counterfeiting a much riskier proposition
And it seems to be quite true.
Ma said Alibaba had employed data techniques to uncover 4,495 potential fraudsters in 2016, but that only 469 were held to account and of those, half received fines less than Rmb10,000 ($1,449).
“There is a lot of bark around stopping counterfeits, but no bite,” he complained. “This reality only encourages more people to produce and sell fake goods.” He added that the punishments must be more severe, calling for penalties “as tough as those for drunk driving”.
Ma’s strategy might work:
Zhang Mao, director of the State Administration for Industry and Commerce, told an NPC press conference that the government is going to strengthen intellectual property laws.
But is Alibaba really doing everything they can?
Alibaba’s call for a review can be judged in two main ways. On the one hand, it may have been backed into a corner. In December, the US government put Alibaba’s C2C site, Taobao, back on its “notorious markets” list and previous allegations about fake goods have also had a detrimental impact on Alibaba’s share price. Yet it could also be a sign that Ma thinks Alibaba is strong enough to weather the short-term hit as it forces the fakers off its online platforms.
Ma’s rival Richard Liu at JD.com is much more scathing. In 2016, he compared his platform’s policy of one strike and you’re out with Alibaba’s three or four strikes. He flagged Alibaba’s stance on counterfeiting as akin to “killing your parents and then asking for mercy on the grounds of being an orphan”.
What do you think?