I have written much about Alibaba this past year, mostly about their counterfeit problem. 8% of China’s GDP relies on counterfeits, the same goes for Alibaba. However this post is not about fake products, but about fake orders.
To get indexed high on Alibaba and featured in certain parts, you need a store that sells item and customers who do not complain a lot. For new sellers this path can take years. However there is a loophole that many take advantage of. That is to create fake orders for fake customers. A seller will give money to a friend of family member, and that person will go buy from that store on Alibaba. The company takes great pleasure in displaying their total orders per year and revenue, but just how much is faked?
Alibaba Vice President Yu Weimin was quoted as saying that the company had found that 1.2 million sellers on its main Taobao shopping site—or roughly 17% of all merchants—had faked 500 million transactions worth 10 billion yuan in 2013. Mr. Yu said those transactions were “only the tip of the iceberg” and his “conservative estimate” was that tens of thousands of people in China were helping online sellers fake transactions.
Google indexes sites based on their value, same goes for companies like Amazon. Alibaba is no different, and new sellers are finding that getting to the top is very hard and takes years. If you are at the bottom of a search page, you are less likely to been seen by a buyer then if you were in the top five. This is something many new sellers tend to fix by fake orders. Here is how it works:
Competing in the business world can be tough, I know as Stigma Search is my second company. Before that I ran a mobile accessories business. The thing is if you want to make it to the top, it takes years and years of having a track record, and tons of hours to work. Fake orders are a easy way out of the bottom, but it will only work while you are at the bottom. Once you get big, fake reviews and orders will not work. That is why it is best to win by having superior customer service, manufacturing, and work ethic.