Alibaba CEO Jack Ma Retires, Counterfeit Empire Remains

Alibaba continues to grow and flood the market with counterfeits

September 11, 2019, Los Angeles, CA – Alibaba's co-founder and CEO, Jack Ma, has bid farewell to the company he founded 20 years ago. Alibaba grew to become China's largest and most valuable private company, an e-commerce juggernaut.

Appropriately named after the fable “Ali Baba and the 40 Thieves,” Alibaba and its subsidiary websites (AliExpress.com, Taobao.com, 11main.com, etc.) offer and facilitate the sale of counterfeit products directly to consumers, and by extension to fraudulent resellers on Amazon, eBay, Walmart, and other e-commerce websites through third-party marketplace sellers.

A reported 60,000 employees packed a stadium to wish him a happy birthday (he's 55) and send him off with song, dance, and fireworks.

In reality, Alibaba floods the worldwide e-commerce marketplace with an inexhaustible supply of counterfeit, fraudulent, and replica goods and is publicly condemned by The Office of the United States Trade Representative, landing it on the U.S. Notorious Markets List - a designation reserved for the world's most notorious markets for counterfeit goods. The global giant is a prudent first-stop for brand-owners to determine if their product is counterfeited.

Peter K. Navarro, White House assistant to President Trump for trade and manufacturing policy, wrote a harsh condemnation in the WSJ; "when you purchase brand-name goods through online third-party marketplaces like Alibaba, Amazon, and eBay, there’s a good chance you’ll end up with a counterfeit." Crushing China's intellectual property theft is a White House negotiating point in current China trade and tariff deliberations, but e-commerce counterfeit products continue to fly under the radar while the websites operate with immunity as "just a venue."

In stark contrast to Alibaba's brand protection claim; "Listings of counterfeits, replicas, or other unauthorized items are prohibited on the Site strictly," award-winning industry watchdog and consumer advocate, The Counterfeit Report, an found and removed over 340 million infringing items on Alibaba websites on behalf of just a handful of brand owners. That's more than one counterfeit for every man, woman, and child in the USA.

Matthew Bassiur, Alibaba’s head of global intellectual property enforcement, says the company is operating an industry-leading anti-counterfeit program. Is it more fiction than fact? There are an estimated 450,000 brands in the world, dwarfing Alibaba's touted collaboration and information sharing with "upwards of 130 leading brands."

Glaring inaction on infringement complaints, a dysfunctional reporting system, and sellers who often relist are illustrative of, and better describe the ineffectiveness of Alibaba's anti-counterfeit program. Counterfeit complaints are ignored, acceptance of unrealistic new reporting terms and conditions is required, and communications go unanswered. Counterfeiters thrive on the platform; counterfeit items often reappear, consumers are deceived, and manufacturers and retailers are harmed in a big way with little recourse.

While Alibaba claims 96 percent of takedown requests were handled within 24 hours, The Counterfeit Report found that takedowns usually take at least a week, sometimes several weeks and dozens of complaints, or the extreme of making a corroborating test purchase which is prohibitively time consuming and expensive for brand owners.

Alibaba's co-founder and bad-boy of counterfeits, Jack Ma, is politically attached to the Communist Party and has now stepped down as CEO. While the lines between business and politics have become increasingly hazy, the relationship between China's government and leading internet companies continues to mature. Alibaba and subsidiaries are best avoided.

Companies that enable and facilitate criminal activity and profit from dishonest sales which impact consumer safety, jobs, and public trust create a public perception of deception and impunity. The consequence is destroyed U.S. companies and retailers, lost U.S. jobs, and duped consumers. The value of counterfeit and pirated goods is forecast to grow to $2.8 trillion and cost 5.4 million net job losses by 2022 states a 2017 International Chamber of Commerce Report. Counterfeiting is the world's largest criminal enterprise.