alibaba tackles counterfeits in china
TRANSCRIPT
Alibaba Tackles Counterfeits in China E-Commerce Giant Faces Big Challenge as Fake Goods Proliferate 5. August From the Wall Street Journal: China’s online e-‐commerce giant, Alibaba Group Holding Lt., is stepping up its battle against counterfeiting, as it prepares for one of the technology industry’s biggest initial public offerings (IPO). The IPO is likely to raise about $70 billion based on analysts' estimates and bankers said it could take place as soon as this year, but Alibaba hasn't set a specific date. Thus for the past several years, the Chinese e-‐commerce giant has been working to remove fake items from its Taobao shopping site. However counterfeiters are persistent in China, which poses a challenge for Alibaba just as bankers and investors are raising their expectations for the company ahead of its initial public offering. Unlike Amazon.com Inc., Alibaba doesn't sell products itself but operates websites that help sellers find buyers. While Alibaba doesn't have much control over who sells what on Taobao-‐-‐a mammoth site with more than 800 million product listings—it has been continuously upgrading the system to delete listings for counterfeit goods. In Alibaba's efforts to
maintain credibility, Tmall, another shopping site that became independent from Taobao in 2011, plays a key role. While anyone with a national identification document can become a seller on Taobao, Alibaba's criteria for Tmall, are more stringent as it tries to make the site a piracy-‐free zone. Alibaba has in the past stumbled in its effort to build trust. In 2011, the company's internal investigation found that more than 2,300 sellers on Alibaba.com committed fraud, sometimes with the help of Alibaba sales staff. The scandal resulted in the resignation of Alibaba.com executives and raised questions about management oversight. While brands are frustrated by the costly battle against piracy in China, they are aware that it is easier to identify and remove counterfeit items online than at retail shops. According to a report released in April by the United Nations' Office on Drugs and Crime, China was the source of about two-‐thirds of counterfeit goods seized around the world between 2008 and 2010.
For more information feel free to write to Christian Brüel [email protected] at Shanghai Jungle. Read more http://online.wsj.com/article/SB10001424127887323968704578649394254345564.html
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