Alibaba Makes it Back to US List of “Notorious Marketplaces”

Published On July 27, 2017 | By Mady Tels | Business

China has been known to be a haven for counterfeit products. As much as the country has been combating this growing industry, counterfeiting remains to be one of the issues plaguing not only China, but also the rest of the world. The Chinese economy has seen extraordinary progress over the years, and there is no doubt that the country has risen without the help of its counterfeiting industry. Many Chinese manufacturing businesses have gone global by exporting knock off products. In fact, one of the biggest companies in China has had its fair share of controversies regarding this issue.

Many may have heard about Alibaba, one of the biggest online marketplaces in the world today. It has become so popular because it caters to all types of consumers and businesses out there. Its founder, Jack Ma, started Alibaba.com in 1999 to connect Chinese manufacturers with overseas consumers and clients. Now, with a market value of over $200 billion, Alibaba has expanded its business reach and relations with affiliated companies. Business entities such as Taobao, Lazada, Aliwangwang, and South China Morning Post all fall under the Alibaba Group’s wide array of business ventures.

In particular, Taobao has become China’s leading consumer-to-consumer online shopping platform. What attracted consumers to this online platform is that anyone can use it to buy and sell their own products for free. Users of Taobao are not required to register or give the company any commission from their sales. With the help of a third party payment method, users are free to conduct business transactions on the platform. For many, Taobao is a fast and easy way to do business. Its major downfall comes to play when consumers fall prey to unreliable sellers. Because of this, the online marketplace has notoriously been known to be a source of counterfeit products.

It has been four years since an Alibaba Group affiliated company was named in the US Trade Representative’s list of notorious markets. In spite of Alibaba’s continued efforts to combat its counterfeit products, Taobao has made it back to that list this year. However, Alibaba is not going down without a fight. In a recent statement made by the company’s President Mike Evans, he said that Alibaba has been monitoring its marketplace much better than in the past. He also suggested that one of the reasons why the company has made it back to the list is because of the country’s political climate.

With Donald Trump as the country’s President, the US policies have been predicted to lean towards protectionism. This, according to Evans, is why the US is trying to gain leverage over foreign companies in order to further America’s interest. Another factor is Trump’s current stance on trade relations with China. Over the past few months, US-China relations have been on the rocks, especially with North Korea’s continued threats against the US. In the same way, China has also had a strained relationship with US ally Japan over a recent incident when a Japanese hotel sold books denying the Nanjing Massacre. This Japanese hotel, under the APA Group, has had a partnership with Alitrip which is also an Alibaba affiliated company. However, ever since the issue, many people have called out Chinese hotel booking agencies to stop their partnership with the APA Group.

Earlier this year, Alibaba was also suspended from the International Anti-Counterfeiting Coalition when several companies including Gucci America and Michael Kors protested the company’s membership. With Taobao making it back to this year’s list of notorious marketplaces, many wonder how this will affect the company and other Chinese businesses venturing into the global market.

 

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