Dive Brief:
- Several international trade groups sent a joint letter to Alibaba in late August telling the Chinese e-commerce giant that it still is not doing enough to curb the volume of counterfeits products appearing on its platforms, the Wall Street Journal reports.
- While acknowledging that Alibaba has taken some steps to reduce the problem of counterfeits, such as outlawing blurred product images, trade organizations including the Union des Fabricants, the French Federation of Leather Goods and the Federation of the Swiss Watch Industry say the retailer's software doesn’t actually detect images of fake products that are blurred, further weakening the groups' trust in Alibaba.
- Meanwhile, U.S. trade group the American Apparel & Footwear Association said separately that Taobao, Alibaba's largest e-commerce site, "is still flooded with counterfeits while the takedown procedures remain as complicated and burdensome as ever,” according to the Journal story.
Dive Insight:
The letter and the comments by the American Apparel & Footwear Association are embarrassing enough — or should be, anyway — to Alibaba, but they come at a time when the company also is facing renewed scrutiny from both the Chinese government and the U.S. Trade Representative agency, the latter of which could decide to add Alibaba marketplaces to a list of foreign sites known for selling counterfeit products. Taobao was on the list at one point, but eventually was taken off.
What's even more embarrassing is that Alibaba supposedly had taken many well publicized steps to mitigate the counterfeits problem. Just in the last couple of months alone, the e-commerce giant launched its IP Joint-Force System, which is supposed to streamline information exchange about intellectual property between brands and Alibaba, and aligned with a French insurance company to help foster a "safe trading environment."
These moves came after Alibaba honcho Jack Ma foolishly claimed that counterfeit products were actually superior to the originals. And that is why we say above that Alibaba "should be" embarrassed, because it has never been clear that the company is embarrassed, and is trying to do as much as it can to stop this problem.
Alibaba's talking like it is trying to do as much as possible, but if that's the case, why are we still left with the impression, via the recent letter from the trade group alliance, that Alibaba doesn't have enough control over its own marketplaces to make headway against the counterfeits?
