Alibaba Tackles Counterfeits in China E-Commerce Giant Faces Big Challenge as Fake Goods Proliferate  5.  August  From  the  Wall  Street  Journal:    China’s  online  e-­‐commerce  giant,  Alibaba  Group  Holding  Lt.,  is  stepping  up  its  battle  against  counterfeiting,  as  it  prepares  for  one  of  the  technology  industry’s  biggest  initial  public  offerings  (IPO).      The  IPO  is  likely  to  raise  about  $70  billion  based  on  analysts'  estimates  and  bankers  said  it  could  take  place  as  soon  as  this  year,  but  Alibaba  hasn't  set  a  specific  date.  Thus  for  the  past  several  years,  the  Chinese  e-­‐commerce  giant  has  been  working  to  remove  fake  items  from  its  Taobao  shopping  site.  However  counterfeiters  are  persistent  in  China,  which  poses  a  challenge  for  Alibaba  just  as  bankers  and  investors  are  raising  their  expectations  for  the  company  ahead  of  its  initial  public  offering.      Unlike  Amazon.com  Inc.,  Alibaba  doesn't  sell  products  itself  but  operates  websites  that  help  sellers  find  buyers.  While  Alibaba  doesn't  have  much  control  over  who  sells  what  on  Taobao-­‐-­‐a  mammoth  site  with  more  than  800  million  product  listings—it  has  been  continuously  upgrading  the  system  to  delete  listings  for  counterfeit  goods.  In  Alibaba's  efforts  to  

maintain  credibility,  Tmall,  another  shopping  site  that  became  independent  from  Taobao  in  2011,  plays  a  key  role.  While  anyone  with  a  national  identification  document  can  become  a  seller  on  Taobao,  Alibaba's  criteria  for  Tmall,  are  more  stringent  as  it  tries  to  make  the  site  a  piracy-­‐free  zone.    Alibaba  has  in  the  past  stumbled  in  its  effort  to  build  trust.  In  2011,  the  company's  internal  investigation  found  that  more  than  2,300  sellers  on  Alibaba.com  committed  fraud,  sometimes  with  the  help  of  Alibaba  sales  staff.  The  scandal  resulted  in  the  resignation  of  Alibaba.com  executives  and  raised  questions  about  management  oversight.    While  brands  are  frustrated  by  the  costly  battle  against  piracy  in  China,  they  are  aware  that  it  is  easier  to  identify  and  remove  counterfeit  items  online  than  at  retail  shops.  According  to  a  report  released  in  April  by  the  United  Nations'  Office  on  Drugs  and  Crime,  China  was  the  source  of  about  two-­‐thirds  of  counterfeit  goods  seized  around  the  world  between  2008  and  2010.  

   For  more  information  feel  free  to  write  to  Christian  Brüel  christianbruel87@gmail.com  at  Shanghai  Jungle.      Read  more            http://online.wsj.com/article/SB10001424127887323968704578649394254345564.html  

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