Image: Jack Ma, Executive Director of Alibaba Group Holdings Ltd.Jack Ma, the Executive Chairman of Alibaba Group Holdings Ltd. admitted that fake products hurts not only the company but also the Chinese economy. Therefore, from May 20, all sellers who deal on luxurious items must prove the product's authenticity.
Defaulters on this China’s biggest online trading website will have their shops closed down, reports confirm.
Alibaba’s online business platform Taobao.com has been synonymous with fake products and scam. Victims of fraud from unverified Taobao ID’s as well as companies whose products have been sold as counterfeits, reportedly, have sought legal remedies against Alibaba Group on several occasions.
The most recent problem faced by this online trading platform affects Michael Korrs and Gucci America.
Image source: Forbes
Making reference to the abysmal economic effects of fake products sold on the website, Jack Ma agrees that: “Alibaba was a victim of counterfeits as the sale of one fake product could lead to the loss of five customers.”
Alibaba’s Executive Chairman also put up a defense on the allegations that his company is taking advantage of the fake product sales to enrich itself. He said: “I don’t believe success can built on dishonesty.”
A report quoted Ma as saying, “The customer complaint rate was only 0.0116 percent, much lower than that of brick-and-mortar shops. Also customers can get refunds and compensation if they buy counterfeits and the shops concerned closed, he said, adding that Alibaba spends hundreds of millions of yuan each year on tracking and fighting counterfeits.
“It leaves visible wounds on Alibaba, but it could severely affect the economic transition,” he said.
Image: Alibaba’s business logo.
Image source: Forbes.
By May 20, an online source confirmed that traders who sell luxury products must provide proof that their items are authentic and genuine. Defaulters will have their trading ID’s removed or stores closed down.
Commercial regulators and police bureaus have also been mandated to handle any such legal cases for further investigations.
Fortune Character Institute’s Director, Zhou Ting said: “A great number of non-official sellers of international luxury brands are expected to collapse in 2016 as e-commerce sites toughen their stance on the sale of fake products.
According to the school which studies consumption habits of the wealthy, “Counterfeit luxury products in China outnumber genuine items six to one.
Image: Alibaba Group Holdings Ltd. and affiliates.
Ma explained that the counterfeit issue will only be finally solved with the help of Internet and big data.
“On the Internet, we have an evaluation system for the goods and also with big data, we can locate those who produce and sell counterfeits,” he said.
“Through 15 years of efforts, we have built a credit system that we are very proud of,” Ma said. “Credit is the cornerstone of everything.”
Image: 10 facts about Alibaba you didn’t know (Source: ExamineChina).
All affected parties ( companies, consumers and genuine products marketers ) expect Alibaba to prove its fight against fake products will serve the interest of end users.