Alibaba Chief "More Confident Than Ever" About Fixing Counterfeit Problem

Chinese e-commerce giant Alibaba Group Holding said at an investor conference on Tuesday it expects to nearly double its transaction volumes by 2020, and to build its customer base to 2 billion by 2036, up from 423 million active buyers in 2016. Alibaba execs further stated that they expect to record 6 trillion yuan ($912 billion) in gross merchandise volume in fiscal 2020, nearly double 3.09 trillion yuan in fiscal 2016. Also up for discussion: The company's struggle with the sale of counterfeits, with Alibaba Executive Chairman Jack Ma pledging to intensify a crackdown. 

On the heels of two separate lawsuits filed against Alibaba by Kering, the luxury conglomerate that owns Gucci, YSL, and Balenciaga, among other brands, in connection with the sale of counterfeit goods, Ma provided vague assurances, saying that Alibaba will do "anything to stop the fake products. I promise you guys that counterfeits, fake products, and intellectual property theft - we are more and more confident than ever that we can solve the problem."

In nearly the same breath, though, Ma had the following to say about counterfeits: “The problem is that the fake products today, they make better quality, better prices than the real products, the real names. The exact factories producing for foreign brands, using the exact raw materials, now replicate luxury goods to the same standards." [It is important to remember here that Ma's business thrives very heavily on the sale of counterfeit goods.]

Just last month, Alibaba caused excessive controversy among members of the International AntiCounterfeiting Coalition for what many are deeming lax efforts to remove counterfeit products from its online platforms. In the week following its admission to the Washington, DC-based nonprofit organization aimed at fighting the sale of counterfeit products, at least three brands, including Gucci, Michael Kors and Tiffany & Co., rescinded their membership status as a direct result of Alibaba being admitted. A number of other brands, including Longchamp and several unnamed members, were also vehemently opposed to the known counterfeiter's inclusion, resulting, ultimately in Alibaba's suspension merely one week later. 

Chairman Jack Ma has been vocal about the company's fight against counterfeits for several years now, calling counterfeit goods a cancer for the marketplace and pledging to clean up the company’s image. Alibaba has reportedly been working with the International AntiCounterfeiting Coalition since 2013, removing 5,000 sellers from its marketplaces and removing 160,000 product listings that contained counterfeit goods. Still, regulators in China and the U.S. continue to monitor its efforts, and luxury companies, such as Kering, continue to be unimpressed. In December, the U.S. Office of the Trade Representative warned that the company needed to do a better job fighting the sale of counterfeit goods and pirated materials if it wished to remain off the government’s annual “Notorious Markets” list.