“This is the cancer. It will destroy our business. We will do anything against it,” Alibaba Chairman Jack Ma said in a speech at the Economic Club of New York on June 9.
He believes Alibaba is the victim—as the people who buy counterfeit products go and complain to Alibaba, rather than to the sellers. He vowed to track down anybody who sells these counterfeit products.
“This is a war and we are getting somewhere. We have 2,000 people working full time against counterfeit products,” he said.
He believes organized crime is behind the sale of large quantities of fake Western luxury products and even said he has gotten death threats because of his fight against the practice.
“They went to Hong Kong and burned my picture” as part of a fake funeral ritual he said. “It’s the war against the criminals, against the bad guys. I am so angry, and I wrote a letter to my employees and to these guys: I will shut down the company if we say sorry to them.”
On the other side of the argument are Western companies who have recently sued Alibaba over precisely this issue. Gucci America Inc., for example, said, Alibaba’s marketplaces “knowingly encourage, assist, and profit from the sale of counterfeits on their online platforms,” according to a copy of the filing reviewed by The Wall Street Journal.
In April, the American Apparel & Footwear Association (AAFA) wrote a bitter letter to the U.S. trade representative (USTR). “Alibaba is either not capable of or interested in addressing this problem,” it said.
In the letter it demanded Alibaba be put back on a black list of illegal marketplaces, from which it was delisted in 2013 prior to its IPO.
And even the State Administration for Industry & Commerce (SAIC), which normally supports Chinese companies, has accused Alibaba of being the culprit in the counterfeiting scandal.
On Jan. 28, SAIC issued a white paper summarizing five major deficiencies found on Alibaba’s sites, including lax control of Alibaba’s shopping platform, inadequate review of commodity information, chaotic management over sales behavior, and a flawed credit ranking system.
Jack Ma, however, is counting on the international community’s support, “I have confidence that with your support and help we can win the war.”
It seems he will currently have to do without it.