Alibaba’s Latest Move in Fighting Fakes

Chinese e-commerce giant, Alibaba Group Holding Ltd has not just been criticized, but has also encountered legal action from luxury brands such as Gucci and others for facilitating the trade of counterfeit goods. The company has been quietly heading a scheme that would aid in curbing fakes at their source. In Fujian province, there is a coastal city of Putian, where the e-commerce giant is working with 17 shoe manufacturers for cultivating home-grown brands online, which would revive a flagging industry and offer an alternative source of livelihood to would-be counterfeiters. According to critics, this is a misguided scheme and Alibaba should focus clean its online marketplace and scrub the numerous listings of fakes.

However, proponents say that the ‘Made in China’ plan is one of the primary reasons why there has been limited progress in the battle against fake goods in China; a lack of attractive options for those making and selling goods that infringe the intellectual property rights of others. One of the firms that have joined the Alibaba group said that there was no way to end this problem forever (the firm itself had been involved in making counterfeit products). According to the senior director of Alibaba’s internet security, Ni Liang, the scheme is an important anti-counterfeit initiative.

They plan to expand the scheme to include bags, toys, household electronics and other industries. They hope that if they create local brands, small manufacturers will stop the process of counterfeit and will join the legitimate sector. Putian is basically the center of high quality fake sneaker business in China, which is a byproduct of a legal footwear industry that employs about one tenth of the 3 million people in the city. Copies of Adidas, Nike, New Balance and shoes of other brands can be found easily. They aren’t easily distinguishable from the real deal, but can be purchased for a fraction of the actual price.

A crackdown has been carried out by the municipal government on fakes. 156 people have been arrested whereas 2 million pairs of counterfeit footwear have been confiscated since 2014. Shoe manufacturers in the online business have been trained by Alibaba. It has helped them in terms of marketing and quality control and also in running sales promotions. 4 million pairs had been sold by the brands in a 3-day campaign. Nonetheless, sneakers are just the beginning as head of the domestic retail marketplaces of Alibaba, Jeff, Zhang, said that more than 60 requests had been received from other industries.

Most hope that Alibaba can aid in re-tooling the local industry in the face of shrinking overseas orders and rising costs. They all want someone who can help them in upgrading their local manufacturing. The scheme launched by Alibaba serves as an economics lifeline. However, giving brands a sale bump is one thing, but creating an entire brand from scratch is completely different. Analysts said that the likelihood of success isn’t quite high because Alibaba just wants to show that it is trying to fight fakes. 

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