Trade groups call for US to blacklist Alibaba over fakes

Dive Brief:

The American Apparel & Footwear Association, which represents more than 1,000 brands, appealed to the Office of the United States Trade Representative on Friday to return Chinese company Alibaba and its e-commerce platforms to the agency’s list of Notorious Markets, the association announced in a press release.
Similarly, Unifab, an anti-counterfeiting group that tracks counterfeits for some 400 French and global brands, told The Wall Street Journal that it is “high time” Alibaba be put back on the USTR’s list after being delisted in 2012.
The U.S. Trade Representative’s office each year announces its findings of the Special 301 Out-of-Cycle Review of Notorious Markets, highlighting companies that are “engaging in and facilitating substantial copyright piracy and trademark counterfeiting,” including fake goods and pirated content.

Dive Insight:

The American Apparel & Footwear Association each year submits recommendations for the trade office’s “Notorious Markets” list, and this year included 118 total online and physical marketplaces that allegedly promote the sales of counterfeit merchandise, including Alibaba.

Last year, the U.S. trade office didn’t name Alibaba on its blacklist, but it did single the Chinese conglomerate and its online marketplaces Tmall and Taobao for needing to work harder to excise counterfeits. But brands continue to report that Alibaba Group’s enforcement program is too slow, difficult to use and lacks transparency. “Brand owners continue to report Alibaba platforms, particularly Taobao, are used to sell large quantities of counterfeit goods,” according to last year's report.

Despite several efforts in the past to fight counterfeit sales, Alibaba has struggled with this issue and failed to mollify brands. Speaking in June at at Alibaba Group's first investor day conference, executive chairman and founder Jack Ma did himself no favors when he said that many knock-offs available on the company’s marketplaces are of better quality than the authentic products they mimic. Ma nevertheless pledged that the company would continue to crack down on sales of counterfeit goods across its platform, and later sought to clarify his remarks in an editorial in The Wall Street Journal.

In its letter, AAFA emphasized Alibaba's failure to meet the USTR's recommendations to prevent the sale of counterfeits on its platforms, according to a press release. The letter refers to research by a Chinese government agency showing that as much as 67% of the goods sold on the company's Taobao platform alone were counterfeit.

"Despite numerous public statements that the company is taking the counterfeit problem seriously, we have yet to see improvements on Alibaba's platforms," AAFA president/CEO Rick Helfenbein said in a statement. "USTR removed Alibaba from its list several years ago, on the condition that the company meet specific requirements going forward. Those requirements have not been met, and as a result American consumers and our members are paying the price."