Kudos to Alibaba

Published Jan 5, 2017

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I can't believe I'm saying this, but... Alibaba Group

Holding needs to hire more lawyers.

China's mammoth e-commerce operator has deployed its

legal eagles against two vendors it accuses of selling fake Swarovski watches

on the company's Taobao marketplace. It's exactly the kind of action Alibaba

needs to take more often.

In a case filed with a Shenzhen court, Alibaba is seeking

1.4 million yuan ($202 000) in damages from two vendors that it identified by

name in a press release Wednesday.

Selling fakes "puts inferior products in the hands

of consumers and ruins the hard-earned trust and reputation Alibaba has with

our customers," the company said.

That reputation has taken a beating over the years

precisely because of the fakes that Alibaba has allowed to flourish on its

websites, resulting in Taobao being labelled a "notorious online

market" by the US Trade Representative last month.

Alibaba complained about that label and accused the USTR

of playing to domestic nationalism, a gripe that I described as petulant

and childish given how easy it is to find fakes on Taobao.

Read also:  Jack Ma pushes Alibaba into car business

Now it's time to give credit where it's due. The move to

put Alibaba's money and effort into suing counterfeit sellers is welcome: not

only for global brands, but for customers and in the long run for its

investors.

There's a saying in Chinese: You kill a chicken to scare

the monkeys.

Obviously, Alibaba can't track down and sue every seller

of fake products. Yet a critical mass of lawsuits will send a message to

vendors: not only is counterfeiting no longer welcome, but the chances of

getting caught and paying hefty costs aren't worth the risk.

Alibaba's long-term business needs to be built on a

reputation for selling quality products that will keep buyers coming back,

not merely as the online equivalent of the local night market.

To get there it needs to clean shop.

BLOOMBERG

 

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