The Negative Public Relation of Alibaba

The Negative Public Relations of Alibaba





Alibaba has come out in defense of its anti-counterfeiting efforts after a string of major brands, including Gucci and Michael Kors, abandoned their membership of the International Anticounterfeiting Coalition (IACC) in protest of Alibaba becoming a member.


The fake goods economy is big business and, according to data from the Organisation for Economic Cooperation and Development (OECD), it accounts for 2.5 per cent of world trade, or roughly $461 billion.

In Alibaba's defense, the firm says it has the most aggressive anti-counterfeit program of any e-commerce company in the world, pointing to its more than 2000 staffers using cloud computing and data mining tools to identify counterfeits as well as its work with local authorities to fight the issue.

"Counterfeiting is a China problem; it's not an Alibaba problem.


For the year ending December 2014, we took down 90 million counterfeit products so we are taking this very seriously," Christie noted.


The Top level brands distanced themselves from the IACC to make a point about how much Alibaba has contributed to the issue of fake goods. Michael Kors sad that membership gives “cover to our most dangerous and damaging adversary”. Many of the same brands are currently or have previously taken legal action with Alibaba about fake goods, with Gucci owners Kering Group still in courts with Alibaba for ‘assisting counterfeiters’.


Alibaba is making an effort to disprove such claims, with Evans’ post also attempting to highlight the initiatives the company has undertaken, including expanding the IACC MarketSafe scheme, using data to track down the source of the issues and working with authorities.


The influential investing magazine Barron's has an unflattering story about Chinese e-commerce giant Alibaba . And Alibaba was not happy about it.


Alibaba, in a letter to Barron's editor Edwin Finn, cited what it felt was a "lack of integrity, professionalism and fairness" by the author of the piece, Jonathan Laing.


Bottom line: More big global brands are likely to leave a major US anti-piracy group after its admission of Alibaba, which will suffer some negative publicity as it tries to clean up its sites of trafficking in fake goods.   How would you feel if your former foe who constantly stole from you suddenly applied for membership in one of your favorite clubs?


The answer is “probably not very happy”, which has led luxury goods giant Gucci to abruptly resign from a global anti-counterfeiting group after it admitted Chinese e-commerce leader Alibaba (NYSE: BABA) as its newest member.


This pair of companies have plenty of bad blood between them due to Gucci’s allegations of pirated goods being sold over Alibaba’s popular online marketplaces.


Gucci parent Kering has sued Alibaba twice over the issue, most recently a year ago in New York, accusing the Chinese company of knowingly assisting in trade of counterfeit goods over its platforms and profiting from the process.


Kering, whose brands also include Yves Saint Laurent isn’t the only one accusing Alibaba of insincerity in its previous claims that it is an active participant in the fight against piracy.


Last year the company became embroiled in a high-profile scandal with one of Beijing’s top commerce regulators that accused it of allowing rampant trade in pirated goods on its Taobao site.


Washington has also warned Alibaba to clean up its act, though it stopped short of adding the company to the latest version of annual list of “notorious” marketplaces for trafficking in pirated goods. (previous post) Another major Alibaba foe on the issue is the American Apparel  & Footwear Association (AAFA), which has used its influence in Washington to pressure Alibaba to clean up its act.


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