Unilever to trial Alibaba's anti-counterfeit codes

Consumer goods giant Unilever has joined forces with Alibaba in a programme that aims to prevent counterfeits on the online retailer's sites.

The Chinese arm of Unilever has signed a memorandum of understanding with Alibaba that -alongside initiatives to expand distribution of consumer goods - will also see Unilever brands carry a new QR code-based technology that the company recently adopted to help fight counterfeits.

The QR codes "will help consumers easily identify counterfeit products with [a] mobile app and provide a special shopping experience for the consumer" and will be added to Unilever's products initially on a trial basis.

The codes are being supplied by Visualead, an Israeli start-up in which Alibaba bought a minority stake earlier this year, and according to earlier reports be supplied to companies who request them at no cost.

Unilever has had a dedicated storefront on Alibaba's Tmall since 2011 and has since also started making use of the online retailer's Tmall Global platform for sales outside China - but the new agreement calls for much closer cooperation between the companies both on- and off-line.

The deal will result in expanded distribution channels - giving customers in rural China better access to Unilever products for example - and also see the two companies working on a 'big data' approach to advertising and driving sales.

AAFA pressure continues

While Unilever's involvement in the coding project is a boost for Alibaba, there was further bad news for the company this week when the American Apparel & Footwear Association (AAFA) launched another broadside at its anti-counterfeiting procedures.

In a letter to Alibaba executive chairman Jack Ma, AAFA chief executive Juanita Duggan said that the organization is asking the Chinese company "to begin addressing counterfeits in a manner that is transparent, comprehensible, and fast."

Specifically, the AAFA is asking the online retailer "to create a process whereby Alibaba removes counterfeits quickly at the request of certified brands." The new letter re-iterates many of the points made in an earlier letter sent in April.

The organization - which has also complained to the US Securities and Exchange Commission (SEC) and US Trade Representative (USTR), wants a four-pronged approach based on: easy brand certification; brand- controlled take-downs of counterfeit listings; brand-approved sales; and a transparent verification process.

"No one understands Alibaba's process – it is obviously flawed. What Alibaba has in place is slow, unclear, cumbersome, and full of barriers," said Duggan.

"The ultimate metric is whether counterfeits on the sites are permanently removed, and right now, they are not."

The AAFA's action comes after individual brand owners are losing patience and starting to take legal action to try to force Alibaba to take a tougher line. In May, luxury goods company Kering - which owns Gucci, Yves Saint Laurent and Puma among other top fashion brands - sued the company for not doing enough to curb the problem.

The company has previously said it employs a 2,000-strong team devoted to counterfeit takedowns and will boost numbers by another 300 this year, and also claims it conducts random checks by using third parties to identify suspected counterfeits on its marketplaces.