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Alibaba’s Taobao Faces Call to Be Renamed a ‘Notorious Market’

Alibaba Group Holding Ltd.’s Taobao shopping website should be put back on the U.S. government’s “Notorious Markets” list for failing to stop the sales of fakes, according to a group representing U.S. clothing makers.
By
  • Bloomberg

HANGZHOU, China — Alibaba Group Holding Ltd.'s Taobao shopping website should be put back on the U.S. government's "Notorious Markets" list for failing to stop the sales of fakes, according to a group representing U.S. clothing makers.

Taobao is synonymous with counterfeits and has been unwilling to make serious reform since it was removed from the list in 2012, the American Apparel & Footwear Association said in a statement. Alibaba is willing to discuss the issue with the trade group, the e-commerce company said in an e-mail.

China's biggest e-commerce operator has battled allegations for years that it facilitates counterfeiting, a key concern of investors worried that the proliferation of fake goods will drive buyers to competitors. The AAFA, which counts Levi Strauss & Co. and Under Armour Inc. as members, said Alibaba has done little to stop the problem.

“Our members face enormous difficulty working with Taobao in solving the problem of counterfeits, meanwhile illegal merchandise continues to proliferate,” Juanita Duggan, the president and chief executive officer of AAFA, said in the statement. “These problems persist despite our repeated efforts to work with them.”

The office of the U.S. Trade Representative compiles the annual name-and-shame list of “Notorious Markets” designed to identify listings of counterfeit goods from jeans to car parts. The association objected to the government’s decision to remove the company from the list before its initial public offering.

Alibaba said the trade group has refused to meet with the company for months and reiterated it is committed to fighting fakes.

“We remain ready to engage the AAFA at their earliest convenience,” Robert Christie, an Alibaba spokesman, said by e- mail. “We work with many AAFA clients daily and they fully know that we are committed to the protection of intellectual property rights and the long-running battle to eradicate counterfeit merchandise that may appear on our marketplaces.”

While accusations about fakes did little to damp enthusiasm for Alibaba’s record-breaking 2014 IPO, criticism from the Chinese government this year has contributed to a 38 percent plummet in its share price.

In a high-profile case, Kering SA is suing Alibaba for profiting from the sale of goods that infringe on its brands, including Gucci and Yves Saint Laurent.

Alibaba is keen to spruce up its image in the U.S. It has beefed up its legal team in Washington and hired executives with political contacts, partly to deal with the government on the issue of piracy.

By Edwin Chan; editors: Michael Tighe and Robert Fenner.

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