Alibaba tries to weave magic to wean firms off fakes
Published 26/05/2015 | 02:30
Criticised and even sued by luxury brand Gucci and others for allegedly facilitating the counterfeit goods trade, Chinese e-commerce giant Alibaba has been quietly piloting a scheme to try to curb fakes at source.
In the coastal city of Putian, in China's Fujian province, Alibaba is working with 17 shoe manufacturers to cultivate home-grown brands online, revitalise a flagging industry and offer would-be counterfeiters an alternative source of livelihood.
Critics say the scheme is misguided and Alibaba should instead focus on scrubbing its online marketplaces of widespread listings of fakes.
But the "Made in China" plan speaks to what proponents say is one of the reasons why there's been only limited progress in the battle against fake goods in China: a lack of attractive alternatives for those making and hawking goods that infringe on others' intellectual property rights.
"You can crack down forever and never see an end to it," said Song Zonghu, who once peddled counterfeit name-brand sneakers and now runs Shuangwei Sporting Goods, one of the firms in the Alibaba programme.
"Creating new opportunities while cracking down is the way to go. Everybody has to eat."
Ni Liang, Alibaba's senior director of internet security, says the scheme is a key anti-counterfeit initiative this year. The group plans to expand it to household electronics, toys, bags and other industries, hoping that by building local brands, small manufacturers will turn away from fakes and serve a legitimate sector.
Putian is the epicentre of China's high-quality fake runners business, a by-product of a legitimate footwear industry that employs a tenth of the city's three million people.
Copies of Nike, Adidas, New Balance and other brand-name shoes made here are hard to distinguish from the real deal, but sell for a fraction of the price.
Alibaba has trained the shoe manufacturers in online business, helped on quality control and marketing, and run sales promotions. In one three-day campaign, the shoe brands sold over four million pairs. Runners are just the start. "We've received more than 60 requests from other industries," said Jeff Zhang, head of Alibaba's domestic retail marketplaces.
The American Apparel & Footwear Association, which has lobbied the US government to put pressure on Alibaba, says the company should focus on making it easier for brands to get listings of fake products taken off Alibaba websites.
Alibaba removed 12m product listings last year following complaints from brands. About 40pc of suspected listings in brand complaints turned out to be genuine or impossible to confirm as fake.
Standing by a motorcycle laden with Nike and Adidas boxes in Putian, Xiao Zhen says business won't dry up any time soon. "If everyone could afford famous shoe brands there wouldn't be anyone making fakes," she said. (Reuters)