Alibaba’s Jack Ma declared that the war on piracy has been more complicated than ever because counterfeits have better quality than the genuine articles.
According to a Bloomberg report, the Alibaba Group Holding Ltd. founder deemed it more difficult to eradicate fakes from their online selling business since customers prefer them over the originals because they are made with better quality.
"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," Ma told the company's investor conference on Tuesday in Hangzhou.
Interestingly, Quartz said Ma opted to divert the attention of the audience and put the blame on the quality of products instead of explaining how they intend to root out counterfeits from the country's largest online shopping platform.
Jack Ma on Counterfeits
During his talk in Alibaba's first-ever investor day since 2014, Jack Ma tackled one of the major concerns in the group's e-commerce leg: counterfeits.
At the time, Ma blamed better-quality fakes as the major reason why battling piracy in the online shopping industry is more difficult.
"The exact factories, the exact raw materials, but they do not use their names," he said per Bloomberg.
"We have to protect [intellectual property], we have to do everything to stop the fake products, but OEMs are making better products at a better price," Ma explained when talking about manufacturers that are hired to make products for branded sellers.
In May, Alibaba's membership with International Anti-Counterfeiting Coalition was suspended due to complaints from fellow members in the non-profit global organization and a conflict of interest with IACC President Bob Barchiesi who owned stocks in Ma's company.
Luxury Brand Sellers' Reaction
Because of this, the Financial Times believes that Ma's remarks would not fare well with the luxury goods industry.
"I am stunned by his comments," said the founder of one Italian luxury goods company who refused to be named.
FT tried to get comments from Bernard Arnault's LVMH luxury group and the Paris-based Kering that sells brands like Bottega Veneta, Gucci and Saint Laurent, but both companies refused to release a statement.
In defense of his remarks during the event, Ma released a statement to clarify the purpose of his speech.
"This is simply my observation of the issues facing brands and OEMs," Ma said. "Counterfeiting is not a quality problem; counterfeiting is an intellectual property problem."