Alibaba

Alibaba Group took its case directly to the Anticounterfeiting Coalition’s annual meeting on Thursday, and urged that the industry collaborate with the Internet giant rather than shut it out.

The keynote speech by Alibaba Group president Michael Evans came amid a storm within the coalition of the group’s decision to extend its general member category to Alibaba as well as to The Real Real and Wish.com. Brands such as Tiffany & Co., Gucci and Michael Kors were said to have threatened to pull out of the IACC, leading the group to suspend its general member category. In turn, Alibaba founder Jack Ma — who was originally scheduled to speak at the coalition’s annual meeting in Orlando, Fla. — backed out and sent Evans instead.

Addressing the matter head on, Evans noted how the decision to create the general member category seemed a bold and visionary move, a reflection of perhaps a move in a collaborative direction. He admitted that change can be difficult, with new ideas sometimes threatening to those who benefit from maintaining the status quo, adding, “[W]e cannot and will not allow a tyranny of the minority to thwart progress in this area. So while the general membership category continues to be evaluated by the IACC board and its members, we will continue to focus on ways to collaborate in this war.”

Earlier, the executive said, “We believe the future of Alibaba — and the future of many of your companies — will depend on us working closely together to fight counterfeits….As the global leader in e-commerce, we have both the responsibility and the commitment to be the global leader in anticounterfeiting. We are 100 percent committed to fighting this matter. We see no path to success other than working closely with you, the brands. And we have the tools to change the way this war is waged. Together, using data and technology, we can become the Special Forces that take on and defeat the counterfeiters.”

He acknowledged that many are likely skeptical of Alibaba — “And you see us as part of the problem, not as a problem solver.” Evans said he understands the thinking behind that conclusion, given that the company is huge. “Just last month, Alibaba became the largest retail commerce company in the world with almost half a trillion dollars of sales, more than 400 million consumers shopping our platforms, tens of million of sellers and more than one billion individual product listings” — and it also operates principally in China, “the manufacturing hub of the world, which sadly also includes manufacturers of counterfeit goods.”

Further, many of the attendees also may have had “firsthand frustrations dealing with us and dealing with counterfeits of your brands on our marketplaces. So we get it. It’s easy to point the finger at us as the source of the problem.”

But Evans also suggested a different point of view: “Our size, where we operate, our insights available through technology and data and our commitment mean we have the tools and resources to make a significant impact on this issue.

“Our goal is not just to be the global leader in e-commerce, but also the global leader in anticounterfeiting. The responsibility for both goes hand in hand. That commitment sounds like the kind of partner you should want on your side,” Evans said.

He cited data, data management and analytics as the company’s strengths, and how it uses them to fight counterfeiters. As examples, he said the company last year blocked 120 million suspicious product listings on Taobao before any brand asked it to do anything, and it also spent $15 million to buy products on its platform that it thought might be counterfeit merchandise. The company also regularly freezes Alipay accounts of those “we suspect are dealing in counterfeits,” he said, adding, “Last year, we froze over $72 million in accounts, and refunded more than $12 million to customers.”

Evans noted the firm’s good faith takedown program, where listings are taken down at a brand’s request, “no questions asked, no further evidence required,” he said.

To expand the benefits of good faith beyond just the brands working with Alibaba, he reminded the attendees that the e-commerce platform supported the creation of the IACC MarketSafe program. Through the latter, working with just 16 brands, “We have shut down nearly 5,000 storefronts,” while more than “180,000 infringing product listings have been taken down,” Evans said, adding that the firm also “actively collaborates with governments, regulators and law enforcement on offline counterfeit investigations.”

He revealed that last year “Louis Vuitton and the Guangzhou police came to us for help to track down a sophisticated counterfeiting operation run out of China and Dubai,” noting that with Alibaba’s help, seven suspects were arrested in China, and two arrested in Dubai.

He said that by 2020, Alibaba plans to generate sales of more than $1 trillion and serve two billion consumers. “Neither Alibaba nor brands can capitalize on this opportunity without trust in our marketplaces, which is undermined by the presence of counterfeits,” Evans said.

He concluded: “We don’t see a path other than working with you, the brands. Together, using data and technology, we can make real progress.”

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