Alibaba case underlines gov't resolution to curb fakes

Want China Times, Xinhua 2015-01-31

Alibaba CEO Jack Ma. (Photo/CNS)

The public spat between Chinese e-commerce giant Alibaba and the country's commerce watchdog has brought the government's resolution to crack down on counterfeiting and protect consumers to the forefont.

The spat was prompted by a sample survey conducted by the State Administration for Industry and Commerce (SAIC), which found more fakes than genuine items were sold on Taobao, a popular online shopping site operated by Alibaba.

The company, which held a record-breaking IPO in New York in September, had more than US$30 billion wiped from its market capitalization in two days ending Thursday.

Alibaba accused SAIC of being biased and wrong, saying they would file a formal complaint. But it promised to establish a 300 person "fake-fighting special operations battalion" to add force to its ongoing combat against counterfeit goods sold by vendors on its sites.

Boosted by a huge number of customers and the largest, constantly improving e-commerce environment, China's online retail market has been thriving over the past few years, leading to the rise of companies such as Alibaba and Jingdong Mall.

As China strives to shift its economy to a consumption-driven model, authorities have taken a series of measures to ensure consumers' interests are being better protected, fining monopolistic practices by both foreign and domestic firms and severely punishing those producing and selling shoddy goods.

The online retail market, still a small portion of retail market in terms of sales but expanding at a phenomenal pace, deserves equal, if not more, attention.

The Chinese government is looking to regulate the market, which has been plagued by rampant counterfeiting, but progress has been slow until now.

The spat may bring some change and kick-start a tougher anti-counterfeit campaign by both the government and the industry.

Both sides should keep their focus on solutions.

Despite intensified supervision, the government should accelerate the adoption of effective legislation and ensure better implementation, while industry players mobilizing more resources to enhance consumer protections.