Alibaba's latest gambit in fighting fakes: foster local brands

Sun May 24, 2015 5:50pm EDT
 
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By John Ruwitch

PUTIAN, China (Reuters) - Criticized and even sued by luxury brand Gucci and others for facilitating the counterfeit goods trade, Chinese e-commerce giant Alibaba Group Holding Ltd has been quietly piloting a scheme to try to curb fakes at source.

In the coastal city of Putian, in Fujian province, Alibaba is working with 17 shoe manufacturers to cultivate home-grown brands online, revitalize a flagging industry and offer would-be counterfeiters an alternative source of livelihood.

Critics say the scheme is misguided and Alibaba should instead focus on scrubbing its online marketplaces of widespread listings of fakes.

But the "Made in China" plan speaks to what proponents say is one of the reasons why there's been only limited progress in the battle against fake goods in China: a lack of attractive alternatives for those making and hawking goods that infringe on others' intellectual property rights.

"You can crack down forever and never see an end to it," said Song Zonghu, who once peddled counterfeit name-brand sneakers and now runs Shuangwei Sporting Goods Co Ltd, one of the firms in the Alibaba program. "Creating new opportunities while cracking down is the way to go. Everybody has to eat."

Ni Liang, Alibaba's senior director of Internet security, says the scheme is a key anti-counterfeit initiative this year. The group plans to expand it to household electronics, toys, bags and other industries, hoping that by building local brands, small manufacturers will turn away from fakes and serve a legitimate sector.

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The logo of Alibaba Group is seen inside the company's headquarters in Hangzhou, Zhejiang province early November 11, 2014. REUTERS/Aly Song