Wars are not cheap. Alibaba spends $161 million to fight counterfeit listings. Hires 2,000 workers and 5,400 volunteers

Submitted by Kevin Hoda on January 2, 2015   News Tags: , , ,
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We have covered many stories on Alibaba’s and China’s problem with counterfeits. You can check out our post here where we discuss just how much Alibaba’s sales are depended on counterfeits.

As this year ends, the total amount that the company has spent on fighting counterfeit listings has been released. The past two years, starting in January 2013 to the end of November this year, Alibaba has spent a total of $160.7 million and has removed 90 million product listings. I guess they do have a lot of money to spend after raising $25 billion in their IPO back in September.

Personal dedicated:

A task force of over 2,000 is spearheading the counterfeit effort with the plan to add another 200 people next year. The Group has also enlisted around 5,400 volunteers to assist with daily online surveillance and selective inspection.

I would question the 5,400 volunteer number. Does registering my name and saying I would help them mean I am a volunteer? Alibaba does not show total hours worked by them or any stats.

Budget:

From the beginning of 2013 till end of November this year, Alibaba Group has invested over RMB1 billion ($160.7 million) focusing on tackling counterfeit and enhancing consumer protection.

Alibaba also released what it has learned this year so far about counterfeiting in China:

An Alibaba Group IPR report found that 90 percent of all counterfeit goods were distributed from 10 regions in China. The top three regions were cities in China’s Pearl River Delta region, Yangtze River Delta region, Southeast China.

By using transaction data and mapping technology Alibaba Group found that more than 60 percent of counterfeit watches and jewelry originate from Southern China, while 60 percent of counterfeit outdoor sporting goods are from Southeast China region and 50 percent of counterfeit apparel originates from Eastern China.

The release goes on to state all the policies Alibaba has towards counterfeits and the sellers that sell them.

Alibaba is not the only company spending tens of millions to fight counterfeits. Google this year announced they would spend $50m to fight ads that lead to counterfeit products. 

Will Alibaba removing counterfeit listings have a negative effect on the company? As shown in our post about Alibaba’s sales, around 10% of its listings could be fake. If they succeed in removing those and keeping them off, their $250b market cap could become smaller if sales fall.

8% of China’s GDP is based on counterfeits. Is Alibaba the same? Leave a comment.

 

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