Speaking at the American Chamber of Commerce in Hong Kong, Helfenbein called Alibaba’s response to the organization’s complaint over fakes the “stupidest defense I’ve ever heard a company make” and said that the Chinese company “needs someone to call them to order”.
Since last year, AAFA has been pushing the US Trade Representative’s office to return Alibaba to its “Notorious Markets” list which identifies online and physical marketplaces that are hubs for counterfeits and digital piracy. AAFA representatives have repeatedly lashed out at the e-commerce giant during speeches and public appearances.
“We have a saying in America since 2008: too big to fail,” Helfenbein said. “What is Alibaba? Too big to have control? That’s the stupidest defense I’ve ever heard a company make. We’re so big we can’t control ourselves. Oh yeah? Watch out. Because we’re not going to let this die. We’re not.”
Helfenbein was referring to Alibaba’s Oct. 7 rebuttal filing to the USTR which stated that “any marketplace with over a billion and a half listings and over seven million merchants operating at any given time will have some number of counterfeit listings.”
In response to the AAFA ceo’s comments, an Alibaba spokeswoman referred to the “more than 100,000 brands have businesses on Alibaba’s platforms — a testament to our success, as well as the trust companies and consumers have in our marketplaces.” She said the company had a “very strong commitment towards intellectual property rights protection.”
The AAFA has complained that Alibaba’s notice and takedown procedures are cumbersome, and counterfeit stores often pop up again as soon as they are taken down. The group wants to see a more transparent reporting process and stricter penalties on merchants who are caught selling fakes, among other measures.
Helfenbein added that Alibaba’s Singles’ Day shopping festival which falls every year on November 11 was not positive for the industry.
“It’s not a good day for retail if a lot of product that’s on the Taobao site is counterfeit. In 2015, SAIC, which is a Chinese state government agency, did a study of counterfeits on Taobao [and found that] 67 percent are counterfeit.”
Last year, consumers smashed expectations by spending $14.3 billion on Singles’ Day via Alibaba’s platforms. This year, the company is trying to get the shopping frenzy started earlier in the lead up to Nov. 11 and has promised virtual reality shopping and a performance by pop singer Katy Perry.
In the Oct. 7 filing, Alibaba said the overwhelming majority of products on its platforms — Tmall, Taobao, and Juhuasuan, are authentic.
Although Helfenbein said that B2C site Tmall was less problematic, he said “as far as I’m concerned, they’re all under the umbrella of Alibaba and Alibaba needs to be responsible for both.”
Helfenbein also spoke about the impact of the upcoming U.S. presidential election on the Trans-Pacific Partnership and stressed the importance of the free trade deal.
“As soon as the elections over, expect a mad rush to see if we can [get TPP to] work. And people will be more reasonable about it after the election because if it doesn’t happen now, I don’t know that you’ll ever see it happen,” he said.
The free trade deal involving 12 nations including the US has been stalled by Congress but some say has a small chance of passing in a lame duck session in November.
If it doesn’t become ratified then, Helfenbein expects that countries will pursue the same measures but in separate, smaller deals which would be easier to get through Congress.
“I think you’ll see 11 bilateral trade deals. So much work has gone into TPP what’s to stop the US from going to Japan and saying ‘hey, you know that deal we were working on? Let’s see if we can make it work just the two of us,'” he said.
“The era of the big trade deals is over. Nobody in their right mind will ever bring a big trade deal to Congress. There were 19 formal meetings for TPP.”