Business

Monday 18 December 2017

Gucci owner seals deal with Alibaba to battle online fakes

A model wears designs by luxury brand Gucci
A model wears designs by luxury brand Gucci

Robert Williams and Marie Mawad

French luxury group Kering has said it will drop its lawsuit against Alibaba, agreeing to work with the Chinese ecommerce emporium to fight the sale of fake products.

The owner of Gucci and Saint Laurent has established a joint task force with Alibaba to take action against sellers of counterfeit products on and offline, the companies said in a statement.

The deal is a breakthrough for Alibaba as it tries to convince brands that it will step up efforts to counter fakes. Accusations of Alibaba's unwillingness or inability to eradicate illegal merchandise culminated in a lawsuit filed in the US by Kering in 2015 against the Chinese ecommerce giant.

"It's clear that Alibaba wants to become a more serious player in luxury," said Luca Solca, an analyst at Exane BNP Paribas. "To do that they need to show luxury brands they're ready to play ball in terms of controlling distribution and prices."

Alibaba is the biggest online merchant in China, with sites including TMall and Taobao, and gets most of its revenue from its home market.

As China's economy matures, the company has been under more pressure to expand globally and has tried to shake its reputation as a haven for cheap knock-offs.

Kering isn't the only company that has complained. Criticism also came from the American Apparel & Footwear Association, which counts Levi Strauss and Under Armour as members.

In January, Alibaba reached an agreement with LVMH's Louis Vuitton and other brand owners to co-operate in the fight against piracy.

Alibaba's billionaire founder Jack Ma this year called on China's top lawmakers to come down harder on counterfeiters, pleading for tougher prison sentences and penalties.

Ma has worked with brand owners including Nike and Adidas to remove fake athletic shoes, watches and bags on Taobao, Alibaba's eBay-like bazaar.

Amazon.com clinched a deal with Nike last month to sell the athletic-shoe maker's products by agreeing to block unauthorised resellers from the site.

Louis Vuitton and Gucci recently launched ecommerce sites in China to try to capitalise on a rebound in luxury sales in the country following a multi-year slump amid a crackdown on corruption. (Bloomberg)

Irish Independent

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