Alibaba founder and CEO Jack Ma speaks before investors during Alibaba's Investor Day in June this year. (Photo : Getty Images)
Alibaba is at risk of being added to the United States' roster of counterfeit marketplaces as the Chinese-owned e-commerce company fails to root out fake products.
A recent report from the Wall Street Journal revealed how the Chinese e-commerce firm owned by billionaire Jack Ma failed in removing counterfeits from its online shopping service.
According to the article, complaints from dozens of trade groups resurfaced after Alibaba failed to make good on its promises to remove counterfeits.
Citing a letter from the groups which include the French Federation of Leather Goods, the Union des Fabricants, and the Federation of the Swiss Watch Industry, the WSJ said that the traders are compelled "to focus on what has not improved," referring to the fake products that still plague Alibaba.
"Trust cannot be hostage to delay," the traders said in the letter, explaining that as much as they want to trust Jack Ma's e-commerce firm, the long wait for an effective action has taken its toll.
In response, Alibaba said that the company is looking forward "to working closely with the brands represented by the trade groups, many of whom have already built successful online businesses on Alibaba platforms."
However, some companies remain doubtful that the issue would be resolved.
"What Alibaba does in response to [brand owners'] complaints is not transparent. It is incomprehensible," said Juanita Duggan, chief executive of the the American Apparel & Footwear Association, in an interview with WSJ.
Back in July, Alibaba announced the launch of a new online selling system that could combat counterfeits called the "IP Joint-Force System."
According to Fortune, this system enhances an existing "good faith takedown" scheme that was introduced in 2015.
Previously, Alibaba Group founder Jack Ma blamed the recurrence of pirated or fake goods in the e-commerce website to the lack of better offers from the authentic brands.
"The problem is that the fake products today, they make better quality, better prices than the real products, the real names. It's not the fake products that destroy them, it's the new business models," he said in June as quoted by Bloomberg.
