China warns e-commerce sites against fakes on Single’s Day

Chinese authorities have met with e-commerce giant Alibaba and other online stores to discuss counterfeiting ahead of the world’s largest online shopping event on 11 November.

Single’s Day, launched in 2009 by Alibaba to celebrate being single, encourages single people to treat themselves by buying themselves a present.

Twenty-seven stores took part in the first year but the day has swelled to become the world’s largest online shopping event. Last year, Alibaba alone netted $14.3bn – a 60 per cent increase on 2014 sales – which trumps last year’s Black Friday and Cyber Monday’s combined earnings of $5.8bn.

With such growing popularity among consumers, Single’s Day has likewise enticed counterfeiters to get in on the action. As a result, e-commerce sites can become flooded with fake goods. Meanwhile some sellers publish fake reviews and others will incrementally bump up prices in the lead up to Single’s Day and then announce “fake discounts”.

There have been numerous allegations of illicit activity during previous Single’s Days, which have also included false advertising and fraudulent accounting practices. Alibaba, for instance, is currently being investigated by the US Securities and Exchange Commission for unaudited revenue numbers it has reported on Single’s Day.

With expectations that this year’s Single’s Day will break records, authorities are beginning to zone in on dodgy activities, said China’s State Administration for Industry and Commerce, which has met with several retailers, including Alibaba and Amazon, to urge the companies to crackdown on abuses.

“The SAIC will strengthen market supervision… monitor and manage online marketplaces according to law, and together with the majority of industry players, jointly create an online market environment of fair competition and an environment for online consumption that is safe and secure. Those operating on the internet need to face [the issues] squarely, to further standardise online market order, and optimise the online consumption environment,” a spokesman said.

Alibaba, which has come in for criticism over its approach to counterfeits on its platforms, told the Financial Times that Alibaba was no place for fakes and emphasised its commitment to weeding out illicit activities on its e-commerce sites. “We are the industry leader in combating unfair and illicit practices; We never tolerate malpractices by merchants on our marketplaces. Infringing merchants are subject to a range of penalties including the permanent closure of their storefront.” a spokesman said.

A similar view was given by Chinese electronic online retailer JD.com, which has also experienced reports of fake sales. “Our commitment to quality products and service has always been a key differentiator for us in this market and we employ additional resources for major sales to keep that promise even during the busiest periods.”

Meanwhile, the government agency in charge of economic planning, the National Development and Reform Commission, said it would clampdown on fake reviews that pop up on Singles Day. This comes as part of a concerted Chinese government-industry effort to eliminate fake online reviews, which has been supported by both Alibaba and JD.com, in a bid to improve online trustworthiness.