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Alibaba Taking Strong Efforts to Counter Fake Products

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Alibaba Group Holding Limited (BABA - Free Report) has been taking every effort to clean up the company’s image as a platform of fake goods.

Alibaba on Friday, at an intellectual property (IP) conference in Hangzou, unveiled its new online system to track and remove fake products from its websites. The company requested brands to help its anti-piracy campaign rather than rebuke the issue.

Jessie Zheng, Alibaba’s chief platform governance officer, said that “In the face of such a complex problem we can’t be complaining about each other, or criticizing each other, instead we have to have everybody involved and work together to do it.”

The company said that this new online platform has been designed to streamline IP-related communications between brands and Alibaba. This new effort is an expansion of the existing “good faith takedown” scheme which was started last year. This will further simplify the removal of listings of suspected counterfeits, making Alibaba’s marketplace more transparent and trustworthy.

With the company’s latest efforts to crack down on fakes, Alibaba is trying to improve the company’s image which has been continuously dogged by accusations that its sites are flooded with counterfeit products.

In May, Alibaba had to take an embarrassing hit in its fight against fakes when it was forced out of the Washington-based International AntiCounterfeiting Coalition, the world’s largest non-profit organization that combats product counterfeiting and piracy. This came after a mutiny by members of the group, including U.S. luxury goods maker Michael Kors Holdings and French group Kering SA's's Gucci brand, against the Chinese firm.

We, like many other analysts, are expecting that these continuous efforts will help the company to maintain the integrity of its marketplaces and will take Alibaba an extra mile in eradicating the counterfeit issue.

However, increasing competition from Baidu, Inc.  (BIDU - Free Report), Inc. (AMZN - Free Report) and eBay Inc. (EBAY - Free Report) remain as an overhang.

The company is slated to report its first-quarter fiscal 2017 results on Aug 10.

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