Alibaba declares war to counterfeit products
Alibaba.com, part of Alibaba group, is a Business to Business e-commerce platform. It is the first one in the world, in front of E-bay! Every day it sees more than 300 million transactions.
Since when are there so many counterfeits on the market?
The presence of counterfeit products was intensified in China during the financial crisis of 2008, when many manufacturers (Original Equipment Manufacturer) began to sell products online with high quality manufacturing but with a big lack of designs and brands. Today, Alibaba is offering resources to these manufacturers (OEMs) to allow them to build their own brands and their own designs for the purpose of minimize their need to produce counterfeit.
Why would Alibaba want to get rid of counterfeits?
Indeed, Jack Ma, the executive chairman of Alibaba Group Holding Ltd, has recently said that counterfeit products harmed his company: when one counterfeit product is sold, he loses five clients. Even if the company is often accused of making profit from the sale of counterfeits, their team has always denied it.
How is Alibaba going to help the fight against counterfeits?
The group indeed has arguments to prove his involvement in the fight against this phenomenon. Firstly, they will reimburse and compensate all customers who have purchased counterfeit products on its site, and then promises to close shops that have sold these goods. The site also has a commodity assessment system that can locate those who produce and sell counterfeit. According to the president and founder of the group, the counterfeit issue can be resolved with an intensive use of big data.
This fight represents huge expenses for the company: up to hundreds of millions yuan each year! Jack Ma announced that the customer complaint rate was much lower on Alibaba.com than in physical stores (only 0.0116% of complaint on the online platform).
The impact of counterfeits in China
The impact of counterfeiting is bearable by Alibaba which set up all the necessary tools to fight it, but it could have serious consequences on the economic transition initiated by China, including high damages to the Chinese manufacturing sector.
“I don’t believe success can built on dishonesty” said Jack Ma.
Jack Ma also pointed out that the health of Alibaba and the Chinese economy are closely linked. The need to include the “Made in China” concept in a long-term dynamic, not only based on the low cost counterfeit production, would be profitable for both Alibaba and the Chinese economy.
The solutions proposed by the Executive Chairman of the group are not only the use of big data in order to locate the manufacturers of counterfeit goods but also tougher laws against counterfeiting to help businesses to create strong brands that can position themselves as competitors against the brands copied today.
Further readings :
- How to Enter the Chinese Market though Digital Marketing
- Alibaba searching for new revenue sources
- Who buys counterfeits?