Alibaba counterfeit crackdown “driving fakes to other platforms”

Once the poster child of the problem of online counterfeits, Alibaba has been working hard to set its house in order, and says 2018 marked another successful year of campaigning against illicit trade on its platforms.

Matthew Bassiur (pictured below right), Alibaba’s head of global intellectual property enforcement, says the company is now operating an industry-leading anti-counterfeit programme, and that is driving counterfeiters to use different distribution channels.

“Counterfeiters are engaged in a multibillion dollar enterprise, so they’re not going to give up so easily - it’s low risk, and high reward,” he tells SecuringIndustry.com. “The migration is to e-commerce platforms that are not as strong in their IP enforcement, and there is also a strong trend …to social media and chat apps.”

“This is place where external stakeholders – rights holders, industry associations, government agencies and academia – are going to have to concentrate a lot of their efforts,” he added.

For Alibaba’s internal efforts, the single biggest factor in tackling the trade has been the collaboration with brand owners, associations and governments, something that it has attempted to generate via its Alibaba Anti-Counterfeiting Alliance (AACA), formed in 2017 to bring cooperation on anti-counterfeit to a much higher level.  

“The days of working in solos to try to address this issue are gone,” he tells us. With upwards of 130 leading brands now involved in the AACA the collaboration is becoming widespread across multiple product categories, and increasingly sophisticated as the partners share intelligence and expertise.

Close interaction with brand owners helps get the most out of all of Alibaba’s anti-counterfeit programmes, which centre around counterfeit listing takedowns, proactive monitoring of listings to try to prevent counterfeits from reaching consumers, and off-line enforcement of actions against offenders.

Last year, 96 per cent of takedown requests were handled within 24 hours, and the number of requests by brand owners declined by a third, which Bassiur said was evidence that the clampdown was having an effect.

Moreover, 96 per cent of proactive removals came before a single sale was made, and the number of listings removed in response to consumer reports of suspected counterfeits fell 70 per cent.

“We’re hearing from rights holders that they are finding fewer and fewer counterfeits across our platforms,” said Bassiur, while consumer satisfaction ratings are significantly improving. On Alibaba’s Taobao platform, for example, the number of refunds given for counterfeit purchases fell by 26 per cent last year.

Offline enforcement – going after the manufacturers, suppliers and distributors of counterfeits – is the third pillar of Alibaba’s strategy and also resulted in some successes last year, with the arrest of 1,953 criminal suspects and the closure of 1,542 facilities involved in the manufacturing and distribution of illicit goods. The total value of these cases was estimated at RMB 7.9 billion ($1.1bn).

“If you want to be a leader in retail…you have to be a leader in IPR enforcement,” says Bassiur. Listing takedowns, while necessary, are not enough as there is a pressing need to disrupt the counterfeit supply chain.

“I think we’re making an impact that goes beyond our platforms, helping to cut off the heads of these counterfeit enterprises and disrupting their operations well beyond the borders of Alibaba,” continues Bassiur.

There are still some areas where Alibaba can make improvements, including encouraging more small- and medium-sized enterpises (SMEs) to sign up to its AACA programme.

“We’re expending a lot of effort to make sure SMEs understand the tools that are available across our platforms to help them protect their IP,” says Bassiur. “That has been one of the biggest challenges because while we work with thousands of the world’s largest brands, it is much harder reach the millions of SMEs worldwide.”

As part of that effort, Alibaba partner with the International AntiCounterfeiting Coalition (IACC) to offer Good Faith programme privileges through the MarketSafe Expansion (MSE) programme, which works to identify and take down infringing listings on Alibaba platforms. Alibaba provides funding to allow rights holders, including SMEs, to access the MSE program without charge.

Meanwhile, despite all its efforts, Alibaba continues to be name-checked in the US Trade Representative’s Notorious Markets list, with its inclusion in the 2018 edition making it three years in a row.

Some might say that having recognised the problem and taken steps to address it, that is a little unfair on Alibaba, particularly when other online retail giants seem to have problems too but haven’t implemented the same level of response.

Bassiur is philosophical on that point. “While we don’t agree with the USTR’s decision, the report does recognise Alibaba’s work in protecting IP…and says a lot of positive things about our programmes.”

“There’s not one association or rights holder that asked for us to be listed,” he says, adding that overall it doesn’t really matter.

“We’re going to do what we need to do. If we’re going to be recognised as the leading retailer in the world, then it is incumbent upon us to be a leader in IPR protection…and we know we are headed in the right direction.”