Jack Ma Vows to Rid Alibaba of Counterfeits

Alibaba Group Holding Ltd. co-founder and CEO Jack Ma has pledged to rid the company of fakes, after receiving complaints from Western brands over counterfeits on its shopping platforms, The Wall Street Journal reported on Tuesday, March 15.

"There's no ceiling for investing in fighting fake goods," Ma told employees in a speech last week at Alibaba's headquarters in Hangzhou. "We plan to add 300 more staff to fight fake goods and we'll add more if it's not enough."

Ma said that although it is a difficult task, eliminating counterfeits online is important both for Alibaba's reputation and for China.

Alibaba said it had invested more than 1 billion yuan ($154 million) over two years to fight the problem and it now has more than 2,000 full-time employees that help fight counterfeits.

Last year, after a public dispute with Alibaba over counterfeits and other issues on its platforms, the State Administration for Industry and Commerce (SAIC) launched a campaign to expel fake and substandard goods from the platform, the report said.

Alibaba and its associated companies have been sued by luxury brands such as Gucci, Balenciaga and Yves Saint Laurent because the company is said to "knowingly encourage, assist and profit from the sale of counterfeits."

Alibaba countered by saying that the lawsuit has no basis and that it has a "strong track record" of helping brands deal with counterfeits online.

To tackle the problem, Ma, in his remarks, urged the use of sophisticated data analysis and technology.

"For so many years, we have been using traditional methods and measures to fight fakes, but the harder we fight, the more pop up," Ma said. "Now is the time to let Internet companies to have a try . . . and solve the issue with big data technology."

Ma added that fighting counterfeit is not the job of Alibaba alone.

"Just rooting out counterfeits from Alibaba's platforms is not being responsible to consumers," the CEO said. "To be really responsible, (the industry) needs to fight them to the extent that they can't survive on WeChat and JD. We need to fight them so they will have no distribution channels, no means to produce, and that they will be tracked down."

The report said that Tencent Holdings Ltd., which manages WeChat messaging app, could not be reached for comment.

A spokesman for JD.com said Tuesday that "every brand and counterfeiter knows which Chinese platform welcomes fakes--and it ain't JD.com. Lip service can't hide the facts."

In response, Alibaba said that "unlike other e-commerce platforms in China, we are not in denial about the counterfeit issue."

Alibaba said it assisted law enforcement in 330 cases of suspected counterfeiting between April and Sept. 2015. The company's news site Alizila said that information from Alibaba has led to 715 arrests and the disruption of more than 600 manufacturing sites or sales locales.