Dive Brief:

• E-commerce giant Alibaba Group Holding Ltd. Tuesday said it has spent nearly $161 million fighting the so-called “grey market” of fake goods since the beginning of 2013.

• Chinese e-commerce is fraught with counterfeit versions of designer and other consumer goods, and Alibaba’s various businesses have been listed as “notorious markets” by the Office of the U.S. Trade Representative, yet was removed in 2012 from the list.

• On Tuesday the company also said it has penalized 131,000 sellers and that it’s cooperating with law enforcement in China in more than 1,000 counterfeit cases.

Dive Insight:

Counterfeit goods sold in China is a prevalent issue and a source of frustration for retailers selling genuine articles. It’s a vexing issue for Alibaba, too, which works with many smaller retailers that are often the ones selling fakes. After all, as the retail giant makes moves to accomplish many of its goals, its “grey market problem” could be an impediment unless it can persuade customers, law enforcement, trade officials, and potential partners that it’s on the up-and-up. Significant moves by Alibaba to take down the grey market could have a wider impact as well.

Alibaba is clearly sensitive to the problem, having already begun to take it seriously well before its record-setting IPO in September.

"From Alibaba Group's perspective, we bear a serious responsibility in this fight against counterfeits," said Alibaba CEO Jonathan Lu.