Jack Ma Set Fire to Alibaba’s Fight Against Counterfeit Products

June 15, 2016

Jack Ma addressed Alibaba’s counterfeit problems at the company’s headquarter on the annual investor day by saying that the fake products were as good as or better than the genuine products. Quality is not the problem of counterfeit products but intellectual property right is. Because of the controversial statement, Jack Ma screen on Sentifi is back on the top attention list with over 500 voices discussing about the view of Alibaba’s executive chairman.

HK - Jack Ma scr jun 15

HK - Jack Ma msg jun 15During the event at Hangzhou, China, Jack Ma said: “The problem is that the fake products today, they make better quality, better prices than the real products, the real names.” Owning the same raw materials and knowing how to make the products, the factories can produce the same products but leave out the brand names. It’s a new business model according to Jack Ma.

The fight between Alibaba and counterfeit products has been ongoing for long as the e-commerce giant was accused of not doing enough to protect the brands and intellectual property. The international labels are furious with Taobao, Alibaba’s consumer-to-consumer platform, and Jack Ma’s latest comment will fuel the anger more.  

Cao Lei, the director of China E-commerce Research Center, also disagreed with Jack Ma. He said it was inappropriate to blame the high quality of counterfeit products as the statement had generalized the phenomenon.

However, Alibaba said that the report had misinterpreted Mr. Ma’s views and quoted him out of context. Zheng Junfang, an executive at Alibaba, said to the Global Times that the statement discussed about a new business model that the original equipment manufacturing factories encountered, which was worth studying further.

The new model described by Jack Ma is about how Chinese producers now seek more ways to make their own products, sell directly to customers and take advantage of the Internet for marketing. They do not have to feel being pickpocketed by the brand owners when they produce the high-quality products anymore. Jack Ma thought this model can be a revolution to the world.

HK - Alibaba sales jun 15

Alibaba also revealed future plans and goals for the company in the next year. The Chinese giant expects a 48% increase in revenue for the first quarter of 2017 thanks to recent acquisitions such as video site Youku Tudou and the e-commerce site Lazada. The company also introduced the metric called gross merchandise volume (GMV) to measure sales but noted that it would not remain the industry’s only standard index. Mr. Ma set the goal for Alibaba to achieve one trillion dollars in GMV by 2020,which would make the company the equivalent of  the world’s fifth-richest country”.

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