This week, the company made what it described as a “strategic investment” in Mei.com, China’s leading flash-sales platform for luxury and fashion products. Reports placed the size of the investment at more than $100 million.
Mei.com holds flash sales at 9 a.m. each morning to “promote genuine goods that are offered at significantly reduced prices.” The site has partnered with about 280 international brands in China’s e-commerce market, including Armani, Zegna, Michael Kors, Trussardi, Roger Vivier, Longchamp,Tumi and Guerlain.
Alibaba said Mei.com’s close cooperation with luxury brands would complement Tmall.com’s assortment of affordable luxury goods.
“We hope that Mei.com will exert its advantages to create synergy with Tmall.com in providing more premium luxury goods to consumers,” said Daniel Zhang, chief executive officer of Alibaba Group. “At the same time, Alibaba will help Mei.com and other brand partners enter our ecosystem to allow more efficiency in helping them locate consumer groups, conduct brand marketing and establish an online supply chain system.”
Thibault Villet, founder and ceo of Mei.com said: “Together with Tmall.com, we will bring premium and trusted genuine brands to consumers. In the future, we see a significant opportunity to provide enhanced shopping experiences for Chinese customers in search of affordable fashion and luxury products.”
Alibaba, which raised a record-breaking $25 billion in its IPO in New York last year, has been criticized by regulators at home and in the U.S. for allowing counterfeits to be sold on through its Taobao platform.
Luxury goods giant Kering sued Alibaba in Manhattan federal court last month after spending months trying to resolve its counterfeit concerns with the Web company outside of courts.
In its suit, Kering charged that the various parts of the Alibaba empire “facilitate and encourage the sale of an enormous number of counterfeit products through their self-described ‘ecosystem,’ which provides manufacturers, sellers, and buyers of counterfeit goods with a marketplace for such goods, and provides online marketing, credit card processing, financing and shipping services that effectuate the sale of the counterfeit products.”
Kering said Alibaba uses behavioral targeting data and analytics to help counterfeiters grow their businesses, processing payments through its Alipay affiliate.
For its part, Alibaba has said it has a “zero-tolerance policy” towards counterfeit goods sold on its platforms. The company has said it invested over $160 million from the beginning of 2013 until November 2014 to deal with counterfeit products. It also hired 2,000 employees who form a counterfeit “task force” to monitor the sale of counterfeit products online.