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Alibaba Blocks 90m Fake Products

Alibaba Blocks 90m Fake ProductsAlibaba Blocks 90m Fake Products

Alibaba Group Holding Ltd., which faced scrutiny for selling counterfeit goods on its websites, said it removed 90 million listings that may have breached intellectual-property rights.

The fake product listings were taken down across Alibaba’s e-commerce platforms through September this year, Chief Risk Officer Polo Shao said at a press conference in Hangzhou Tuesday, Bloomberg said.

Alibaba, which raised a record $25 billion in an initial public offering in September, said it spent $160.7 million from the beginning of 2013 through last month to block counterfeit products and boost consumer protection.

The strategy is part of Alibaba’s plan to build its reputation now that the company is larger in market value than General Electric Co. and Procter & Gamble Co.  Controlling the sales of fake and pirated goods will be crucial in maintaining credibility with investors and limiting risks of lawsuits.

“Selling counterfeits has been one of the key criticisms that Alibaba has faced,” said Vanessa Zeng, an analyst at Forrester Research Inc. in Beijing. “Even though the company’s shares have done well, it doesn’t mean that Alibaba isn’t aware of the risks down the road.”

China’s largest e-commerce company, based in Hangzhou, has gained 60 percent since its IPO, compared with a 0.9 percent decline in the NYSE Composite Index.

  larger legal issue

Alibaba’s efforts to fight copyright infringement are part of a larger legal issue in China. The country is host to a number of markets known for “prominent and extensive availability of counterfeit merchandise,” the Office of the US Trade Representative said in a February report. It cited Beijing’s Silk Market and Guangdong’s Zengcheng International Jeans Market, where vendors set up stalls, as examples.

“The fact that Alibaba has a system set up to raise complaints about counterfeit products is an improvement compared with the other on-the-ground shops,” Zeng said.

 

Financialtribune.com