Alibaba Group’s Taobao Draws Flak for Fake Wholesale Products

Alibaba Group’s Taobao Marketplace Draws Flak for Counterfeit Products

In the run-up to Alibaba Group’s initial public offerings in the US, its sister company Taobao receives the ire of manufacturers and suppliers for a wide variety of counterfeit merchandise found on its online marketplace. 

David Hon, chief executive officer of Dahon Bikes, estimates that out of the 58,000 Dahon folding bicycles listed in Taobao for sale, roughly 50 percent are fakes or otherwise infringe on Dahon’s intellectual property rights. 

The sporting good’s executive added that counterfeit Dahon in Taobao even increased tenfold over the past two years, prompting the CA-based company to ramp up its fraud-fighting resources. Dahon now employs four staffers and spends about $200,000 annually to fight counterfeits not only in Taobao but worldwide.

Columbia Sportswear Co., an outdoor apparel manufacturer based in Portland, shares the same fate as Dahon’s. Its director for intellectual property John Motley suspects that 32 of the 39 Columbia jackets for sale late last year on Taobao were fake.

Columbia has been trying to fight counterfeits for half a decade now, specifically those listed in Taobao. The company hired software firm MarkMonitor to scan through listings and images, looking for sellers of Columbia knockoffs and then reporting them to Taobao. Last year, Columbia has gotten 21,311 Taobao listings taken down, Motley was quoted as saying.

Taobao, removed in 2012 from the US Trade Representative’s list of “notorious markets” for knockoffs, through the Alibaba Group said it spends over $16.1 million yearly combatting counterfeiters.

According to a February report filed with the World Intellectual Property Organization, Alibaba deleted more than 100 million product listings that it suspected of intellectual property infringement. The company has even partnered with Chinese law enforcement in resolving 77 counterfeit cases, leading to the arrests of 51 criminal groups.

ABOUT TAOBAO: Founded by China-based Alibaba Group, Taobao offers a shopping marketplace for consumers in Asia. The company facilitates deals between buyers and a wide array of sellers, including online retailers, wholesalers, and private individuals. Competing against eBay in Asia, Taobao allows it user base to post new and used goods for sale — either through a fixed price, negotiated sale, or by auction.

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