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4-Traders Homepage  >  Equities  >  Nyse  >  Alibaba Group Holding    BABA

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Alibaba leads the fight against counterfeit goods

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10/02/2017 | 10:50am CEST

The online retailer is adopting strong measures to unearth vendors of fake items, as Guo Ying and Zhao Wanwei report for Xinhua China Features.

Members of a secret team working for the e-commerce giant Alibaba have the task of pretending to be online consumers who test-buy items from the billion-plus products on the company's platforms.

The team members spot-check about 100,000 products, spending approximately 100 million yuan ($15 million) a year on average.

"The spot-checks are not random. They are guided by big data from our platforms," said Qin Seng, the team leader. Using product ratings, consumer disputes and other information, the team builds a model to identify suspected counterfeit goods and the shops that sell them.

The whole process is videoed to retain the evidence. The sample purchases are sent to copyright holders or authoritative quality inspection agencies. If identified as fake, the products are removed from the platform and the vendors face closure of their online shops. If the products are identified as genuine, they are stored as Alibaba assets.

Alibaba's Storehouse of Counterfeit Evidence is a 300-square-meter warehouse in the company's Xixi Park complex, in Hangzhou, the capital of Zhejiang province. Counterfeit goods can be stored there as legal evidence for more than three years.

The spot-checks illustrate the breadth of China's battle against counterfeits in the internet era.

Chai Haitao, deputy director of the Office of the National Leading Group of the Fight against IPR Infringement and Counterfeiting, said the rapid development of China's internet economy means infringements and counterfeits are seen constantly.

"We need to strengthen cross-sector, cross-regional and cross-border cooperation to combat counterfeits. We also need to mobilize enterprises, industry organizations and the public," Chai said.

Alibaba'sAnti-Counterfeiting Special Task Force, formed last year, actively works with local law enforcement agencies, according to Qin.

"After we clean up online shops selling counterfeits, the counterfeiters usually change their identities and places of dispatch, using more covert means to continue selling online," he said.

The team uses big data to identify counterfeits and the vendors, affiliated dealers and factories suspected of selling and producing fake items. They pass evidence to the public security authorities, and a number of other law-enforcement agencies, including those for commerce and industry, quality inspection, and food and drugs.

At the same time, the team members also nvestigate evidence in the field.

Team members face many risks in their offline probes.

"Most counterfeiting dens are hidden and well-organized. For example, we encountered a village producing counterfeits. The villagers had installed cameras everywhere and when they saw outsiders entering, they became more vigilant and even threatened us," Qin recalled.

Alibaba's cooperation with local authorities to locate sources of counterfeit goods has proved effective. The company has partnerships with public security bureaus in 13 provinces. Last year, Alibaba submitted 1,184 leads to law-enforcement agencies, which helped public security bureaus arrest 880 suspects and assisted in the closure of 1,419 counterfeit manufacturing locations. In all, the operations seized merchandise worth more than 3 billion yuan.

In August, with evidence from Alibaba, police in Loudi, Hunan province, broke up a ring that produced and sold counterfeit weight-loss drugs.

With a sales network in more than 20 provinces, the ring's total trade exceeded 100 million yuan.

In the eyes of Sun Jungong, Alibaba's vice-president, spot-checks and data-driven proactive monitoring protect the platform's good shopping environment, while cooperation with law-enforcement agencies is part of effective collaborative governance.

"We hope to take advantage of Alibaba's big data and strong data-mining capabilities. By expanding offline cooperation, we aim to tackle this issue at its source," Sun said.

Wang Xin, a professor at Peking University'sLaw School, said the rapid development of China's e-commerce platforms and the emergence of new online shopping models have provided a growing number of sales channels for fake goods.

He noted that China has made great efforts in recent years to stamp out infringements of intellectual property rights by strengthening laws and setting up specialist IPR courts.

However, he conceded that the penalties for counterfeit producers and vendors are not an effective deterrent because many producers of counterfeit goods only receive suspended sentences or fines.

He suggested that repeat offenders should be banned from the credit market.

Alibaba's analysis has also established that some online consumers are happy to purchase counterfeits knowingly.

Sun said raising awareness among consumers is essential in the battle against fakes.

"Everyone can do their bit to stop counterfeit goods. If society reaches a consensus, as with drink-driving, we are more likely to tackle this problem effectively," he said.

Top: Members of Alibaba'sAntiCounterfeiting Task Force discuss the geographical distribution of fake goods during a briefing session. Above: New team members work out at a training facility.Zhou Gangfeng/ For China Daily

(China Daily USA10/02/2017 page15)

(c) 2017 China Daily Information Company. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

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Financials ( CNY)
Sales 2018 236 B
EBIT 2018 94 542 M
Net income 2018 59 690 M
Finance 2018 148 B
Yield 2018 -
P/E ratio 2018 52,20
P/E ratio 2019 36,68
EV / Sales 2018 12,1x
EV / Sales 2019 8,72x
Capitalization 3 006 B
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