China’s e-commerce giant Alibaba Group Holding Ltd., which is preparing to list in the United States, is still struggling to rid its online marketplace Taobao of counterfeit goods, the Wall Street Journal reported Monday.
For example, of the roughly 58,000 folding bicycles for sale on Taobao, up to half are knockoffs or infringe on the intellectual property of Dahon, the world’s largest manufacturer of folding bikes based in Duarte, California, David Hon, the company’s chief executive, told the newspaper.
The number of counterfeit Dahons on the online marketplace has surged up to 20-fold in the past two years, costing the company a few million dollars in sales each year and forcing it to ramp up its resources to fight fraud, the report said.
“We keep complaining” to Taobao, Hon was quoted as saying. “The [counterfeiters] stop doing this for a while, and then a few months later, they resurface and open up another store.”
Alibaba spends more than 100 million yuan (US$16.1 million) a year to fight counterfeit goods, according to a report it filed with the World Intellectual Property Organization.
In 2013 alone, the group removed more than 100 million listings suspected of intellectual property rights violations and cooperated with law enforcement agencies in 77 counterfeit cases, resulting in the arrest of 51 criminal groups, the report said.
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