Alibaba

SHANGHAIAlibaba has unveiled a new online platform to aid in the fight against counterfeits on its sites, but experts are divided about whether the measures will be effective.

The Intellectual Property Joint-Force System, which was revealed last week during Alibaba’s inaugural Rights Holders Collaboration Summit in Hangzhou, aims to give participating brands a dedicated online portal and account manager to better facilitate the removal of counterfeits from the consumer-to-consumer Taobao marketplace, as well as the business-to-consumer platform Tmall.

One of the main selling points of the portal is its use of Alibaba’s big data, including digital analysis of images, to help recognize potential intellectual property violations. Those images would then be confirmed by brands that would work with a dedicated Alibaba account manager to remove any counterfeit products.

This is just the latest incarnation of Alibaba’s attempts to beat back the onslaught of fake products on its platforms. Last August, an English-language version of the e-commerce company’s online complaints reporting platform, TaoProtect, was released. The firm then created the Good-Faith Takedown Program to expedite the process. This program has 700 participating brands, all of which will eventually have access to the new platform — though no timeline was given for the completion of this process.

“The IP Joint-Force System is a revolutionary industry solution that will redefine how IP enforcement is conducted in the digital age, where brands and e-commerce marketplaces must work collectively and strategically to combat counterfeiters,” said Matthew Bassiur, Alibaba’s head of global IP enforcement.

Others think the maneuver is less than revolutionary.

“There is already a take down program where any brand on Tmall – but they need to be on Tmall – can actually enforce their IP rights and go through the Alibaba group and this is working. This is just the same program with a new name,” said Patrice Nordey, the Shanghai-based chief executive officer of digital inception agency Velvet.

“We have no clue about how this program will work, how it’s different from what has been tried in the past,” he added. “How brands can technically submit a request or check if any vendor or product is actually a counterfeit product or not. I think it’s just for show.”

Another potential point of contention is the extent to which brands are responsible for being pro-active in identifying any infringements against their IP rights.

According to Samuel Coopersmith, an associate at SmithStreet Solutions, this is an avoidable problem, considering the nature of these platforms, as Alibaba is in essence a third-party service provider. “Viewing it from a Western brand’s perspective they aren’t going to view it as their responsibility. At the end of the day, which goes back to the nature of the platform, a lot of the responsibility for better or worse needs to fall on the brands,” he said.

It’s been a rocky first half of 2016 for Alibaba. The e-commerce behemoth has continued to see extraordinary growth, but has also come under increasing pressure from international partners to stem the flow of fake products on their platforms.

With mass defections from members on the cards, the International Anticounterfeiting Coalition [IACC] suspended Alibaba’s controversial membership in May, prompting the company’s founder and executive chairman Jack Ma to skip a planned appearance at IACC’s spring conference. Also in May, the Securities and Exchange Commission opened an investigation into Alibaba’s accounting practices, including how it reports results for Singles’ Day — the Chinese shopping event the e-commerce giant invented and built into a $14.3 billion shopping extravaganza.

Then in June, Ma was once again in the headlines following a speech at Alibaba’s investor conference in Hangzhou, in which he urged Alibaba’s brand partners and government agencies to work with the company in combating the pervasive problem of counterfeits in China. He also bemoaned the difficulties Alibaba faces in keeping counterfeits off its sites. More controversially, he seemed to say that counterfeit products were hard to combat because they were made to such a high quality that it was difficult to tell the difference between counterfeit and genuine branded goods.

“The problem is that fake products today are better quality and [at a] better price than the real names. They are the exact factories, the exact raw materials, but they don’t use the brand names,” Ma said.

Since then Alibaba and its founder have been on the back foot about fakes, with Ma penning an op-ed in The Wall Street Journal reiterating he and his company’s dedication to obliterating the market for fakes on Chinese e-commerce platforms.

The timing of this latest announcement indicates that it, too, is another step on Alibaba’s road to redemption with international brands. And it also comes as the company’s home town of Hangzhou gears up to welcome a coterie of notables for a G20 summit in September.

“I think the context of this announcement has to take into account the G20, which will be held in China, in Hangzhou, and Alibaba will be under the spotlight, representing China,” Nordey said. “Especially after what Jack Ma said to the investors a couple of weeks ago, to have another announcement that might give a good message to the world about Alibaba and e-commerce in China being a healthy place – this weighed a lot into this announcement.”