The counterfeit saga – Alibaba blacklisted in US, sues sellers over fake brands
The ecommerce industry has been battling theproblem of fake brandssince the time online shopping (and selling) became popular. Most marketplaces are having to take strict measures to combat the issue, but if the marketplace has immense reach, it becomes unrealistic to carry out checks on all sellers who sign up.
Alibaba has been having its share of fake brands sold on its website. The Chinese ecommerce giantspent $ 161 billion in 2014to fight against the increasing problem of counterfeit brands sold on its platform.
However, sadly for Alibaba, the battle is far from won. The company has initiatedlegal proceedings against two sellerswho were selling fake brands. The sellers were allegedly selling Swarovski watches, and are being sued for 1.4 million yuan (or $200,000). The legal move comes shortly after theUS Trade Representative office put Alibaba on blacklistfor the counterfeit problem.
China and counterfeit products
To weed out fake products, Alibaba will have to address the root problem of counterfeiting, which is deeply entrenched in China. ColumnistAdam Minter rightly statesthat without government backing, it will be near impossible to shut down the$396 billion per annumcounterfeit industry. Minter points out thatseveral locals are involvedin the manufacturing of products, and to shut down the counterfeit industry as a whole will result in loss of employment for them.
Counterfeit trade in Indian ecommerce
Close neighbour India has not been spared by the problems of fake brands and the usurping of trademarks. Recently,sellers were lamentingthe inaction ofAmazonon unauthorised sale of products that are trademarks. Theluxury brandsection was suffering from counterfeit products, causing serious damage to the reputation of the companies and the marketplaces.
Flipkarthad come up withmystery shoppers, its own employees, to purchase products and report the sale of fake goods. While this could be a starting point, marketplaces ought to take strict measures like Alibaba has, by taking legal recourse. Apart from a background check, warning and blacklisting sellers who indulge in such activities will help curb selling counterfeit brands online.