With Alibaba going public, are they doing enough to combat counterfeits?

After saying they are going public month after month for this past year, it seems a date if finally here. Alibaba.com plans to list its stock around September 15.

Alibaba has a network of eCommerce websites, the most famous being Alibaba, and Taobao. Anyone who has been to any of these sites know they have two things. A huge list of products, and a equal amount of suspected counterfeit products. For the past 2 years, the Alibaba network has increased its effort to remove listings suspected of intellectual property infringement. This is in part as the company is getting very large and wants to make a IPO. If you recall, Alibaba was placed under the US Notorious Market’s list in 2012 for allowing so much counterfeits to be listed. Earlier this month, brand owners such as Gucci, filed a 147 page complaint against Alibaba. The lawsuit was dropped a few weeks later due to Alibaba starting negotiations with the brand owners.

The Alibaba.com website is a lot cleaner that the way it was a few years ago. I used to use Alibaba to import products, and the amount of counterfeit items you could buy was staggering. Sellers and Alibaba did not even try to hide it. Just search on the site, and almost every brand name was there. All counterfeit. While it is really easy to still find counterfeits on the site, searches for big brand names like Gucci are not returning what they used too. This does not mean they are not listed on the site. A common tactic by counterfeiters is just to not include the brand name in the title or tags. This way the listings are not found via search.  The sellers are still there, still listing the product, just a different name.

Alibaba opened a great communication website between the world and China. Before it was hard to find sellers and manufacturers. Now it is easier then ever.  Need a product with a brand on it? Not a problem if you cant find a listing, just ask a seller. You will find sellers and manufacturers will make anything.

I did a search of Alibaba.com for ‘Gucci’. Counterfeit listings are still there, even for this brand which fights all the time online to have these removed. Here is a $8 Gucci Belt:

The seller has this description

“We are brand  manufacturer and direct wholesaler, we  guarantee the lowest price of the whole market at the same high quality level!”

In other words, if you want a counterfeit product, ask him.

Looking at other results, it seems a new way counterfeiters are able to list without Alibaba saying anything, is to list the product as “used” and “vintage”. This way, a seller can claim the item looks different because it is not new but old and used. This seller below sells a Gucci Bag:
Only 12 dollars. They too, will make you any item you want with a brand image. From the seller:

We can provide used products from a variety of categories,
including designer bags, watches, and jewelry.

Alibaba is not alone. Sites like eBay and Amazon are flooded with fake goods too. eBay is having lawsuits all the time from brand owners. So even if a company is public and makes tons of money, fighting counterfeiters is a tough job, and a job that does not produce revenue for these companies, but takes it out.  According to the companies press releases, Alibaba spent $16.1 million to fight counterfeits last year. One problem that brand owners have with the Alibaba network is that they investigate all reports of counterfeiting. Sites like eBay and Amazon will remove the listings within 12 hours of being reported. All automated. Alibaba can take 10-15 days. The company changed  this policy in May, and now offers a service to remove much like eBay’s. That is just for Alibaba though, Taobao still does it manually, employing over 200 people to work on copyright claims.

Taobao, which is meant for more of a Chinese audience,  has the largest problem. Alibaba looks like nothing compared to the level of counterfeiting on Taobao. Last year the site removed 87 million listings suspected of copyright infringement. The same year the company said they had around 800 million total listings. That makes 87 million around 10% of the total listings. The company was forced to remove these in order to get off the US Notorious Market List. So, a question to ask is:  Just how large is the amount of counterfeit products  being sold on this site , and can the company stay in operations without these counterfeit listings?



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