Alibaba is one of the most successful online sellers in the world. This online platform “dominates the world’s largest e-commerce market” (Rein 27). It earns billions of dollars each year. The company was set up in 1999 as a platform for small business and consumers who could sell and buy goods safely online (“About Alibaba.com”).
It is noteworthy that the company earned its popularity due to the large array of products available and the payment system people could trust. When other online sellers used payment systems that were little known to Chines people or could be unsafe, Alibaba used Alipay system that was safe and known to the company’s customers.
However, the Chinese platform has been criticized by various producers (including Adidas, Gucci, Yves Saint Laurent and so on) as various counterfeit products are sold and bought there (Chu). It is necessary to note that selling counterfeit goods is illegal in many countries (including China) as these goods break copyright laws, and they can be unsafe for customers (Narayanan 21).
Of course, producers of goods (especially famous brands) lose millions or even billions of dollars due to the problem. The company largely ignored accusations, but it took definite steps to address the problem in 2011 (Hu and Guo 237). Alibaba had to make such a decision to keep its customers, brands known worldwide.
The paper will include an analysis of the steps undertaken and some recommendations on the way to improve the situation. Thus, Alibaba’s spokesman claims that they keep working with various brands “to help them protect their intellectual property” (Raymond). One of the principal steps is the development of Tmall website.
This platform is characterized by sales directly from the brands’ storehouses. Of course, this site has earned trust among consumers who are sure that they buy genuine products (Rein 28). Notably, one of the first companies to join the platform was Adidas. However, it is also necessary to add that various counterfeit products are sold with the use of the rest of websites that are a part of the platform.
Another step undertaken is the development of a particular reporting system. Producers can fill in certain forms to report about counterfeit products found at the websites. However, producers argue that the new system is more complicated, and it makes it difficult or even impossible to report (Chu). Producers stress that the new reporting methods are inefficient and should be changed.
It can be recommended to change the reporting system. It should be simple, and the company should undertake particular steps to respond to each report. Alibaba’s officials claim that the company spends $16 million on tracking counterfeit products and reacting adequately. The development of an efficient reporting system will help optimize the process and reduce the expenditure. It can also be effective to launch new websites that sell goods directly from companies’ storehouses.
Old websites where most counterfeit products are found should be closed. Finally, the platform should also have a comprehensive IPR protection policy that would ensure that the producers and sellers are responsible. This policy should involve significant fines for violators as well as the possibility to restrict the activity of the violators at Alibaba. The company can also be an initiator of the creation of a single database of repetitive offenders and sellers of counterfeit products that will be available for producers and customers.
Works Cited
About Alibaba. 2015. Web.
Chu, Kathy. “Alibaba Revamps Fake-Goods Procedures.” The Wall Street Journal 2015. Web.
Hu, Weiwei, and Yimeei Guo. “Combating Against Counterfeit: Third Party E-Commerce Trade Platform’s Liability Analysis.” Research on Selected China’s Legal Issues of E-Business. Ed. Yimeei Guo. New York: Springer, 2014. 231-239. Print.
Narayanan, Sukumar. “Global Issues and Threats of E-Commerce on Counterfeit Batteries.” International Journal of Advance Research in Computer Science and Management Studies 2.2 (2014): 21-27. Print.
Raymond, Nate. “Alibaba Sued in US by Luxury Brands over Counterfeit Goods.” Reuters 2015. Web.
Rein, Shaun. The End of Copycat China: The Rise of Creativity, Innovation, and Individualism in Asia. Hoboken: John WILEY & Sons, 2014. Print.