Alibaba is one of the biggest names in ecommerce and mobile payments in China, and with a distinction like that, it means the world itself isn’t far behind.
However, with this distinction has brought plenty of detractors, and the most recent round of such comes from allegations that Alibaba is supporting counterfeit goods.
The latest reports suggest that the American Apparel and Footwear Association (AAFA), a trade group that serves as a united front among several worldwide brands, is pushing for Alibaba to be added (and not for the first time either, reports note) to the Notorious Markets list maintained by the Office of the United States Trade Representative (USTR).
Firms found on the Notorious Markets list are considered to be “…engaging in and facilitating substantial copyright piracy and trademark counterfeiting”, which includes not only pirated content, but also fake goods.
The AAFA didn’t just focus on Alibaba, meanwhile, but rather had an entire list of such companies ready to go, a list which numbered 118 individual firms.
The USTR, for its part, didn’t put Alibaba on the list, but rather warned the company instead-along with its various online marketplaces like Taobao and Tmall-that it “needed to do more to shut down counterfeits.” Alibaba was seen to agree with this stance, and undertook several efforts in that direction, though this doesn’t seem to satisfy the AAFA much.
Counterfeit goods are a difficult picture for any economy to consider. While consumers tend to love the vastly reduced prices on goods that look similar to much higher-priced items, businesses that need to develop and market the goods that counterfeits emulate tend to need that cash to cover the costs of development and marketing.
Businesses need to protect that market, and so respond in much the same way as the AAFA did. Admittedly, this doesn’t affect much of the market outside China, but given how big the Chinese market could be, the AAFA wants the best shot at that market for its members. If counterfeits are readily available, then that reduces the market overall.
The AAFA is reacting defensively, and with good reason, but it’s still going to have a fight on its hands to properly breach the Chinese market.