- Joined
- Oct 26, 2016
- Messages
- 181
Sent from my SAMSUNG-SM-G935A using Tapatalk
The BladeForums.com 2024 Traditional Knife is available! Price is $250 ea (shipped within CONUS).
Order here: https://www.bladeforums.com/help/2024-traditional/
Why Alibabas Jack Ma Said China Makes High-Quality Counterfeit Goods
Posted June 21, 2016 by Abe Sauer
Just telling it like it is might not be a very*diplomatic*explanationand yet, thats the tactic by*Alibaba founder and chairman*Jack Ma in defending the proliferation of*counterfeit goods for sale across his channelsthe B2B Alibaba.com and consumer-facing Taobao and Tmall.com e-commerce virtual malls.*As he seeks more credibility and business partners beyond China, Ma is also being challenged over*his companys ongoing failure to police the sales of knock-offs.
In a speech during an Investors Day at*Alibaba headquarters last week, Ma said that fake products today are of better quality and better price than the real names. He continued, The problem is the fake products today are of better quality and better price than the real names. They are exactly the [same] factories, exactly the same raw materials, but they do not use the names.
We have to protect (intellectual property), we have to do everything to stop the fake products, but OEMs (original equipment manufacturers) are making better products at a better price, Ma*added*in an e-commerce version of Sorry Im cheating on you, honey, but you have to admit shes better-looking and*laughs at my jokes.
After a collective raising of eyebrows,*Alibaba quickly*issued a statement by the company founder explaining*that his remarks were not intended to be interpreted as a defense of counterfeiters: This is simply my observation of the issues facing brands and OEMs. Counterfeiting is not a quality problem; counterfeiting is an intellectual property problem.
Mas faux pas*followed*Alibabas suspension last month from the US-based International Anti-Counterfeiting Coalition (IACC). The Chinese companys membership was controversial from the start, with brands including*Michael Kors seeing a fox in the henhouse and threatening to boycott*the IACC over Alibabas membership.
Alibaba has been*sued repeatedly for IP violations, including*by French*luxury brand house Kering, whose brands include Gucci and Yves Saint Laurent. Alibabas suspension came after the report that IACC President Robert Barchiesi failed to disclose his Alibaba stock holdings. This news helped explain what was already an ironic and dodgy extension of membership.
Ma is apparently just telling it like it is when he points out that the Kores Kors*brand on Tmall.com*sells nearly identical quality handbags as Michael Kors. Both are produced in China using the same (or slightly cheaper) materials, the same labor and perhaps*even the same factories and production lines. Other Chinese brands make bags*resembling popular luxury products with unrelated names.
Ma doesnt want to alienate Western brands or consumers, nor does he want to imply that*Alibaba*may sell*counterfeits but theyre*quality counterfeits. (Why pay retail? We have high-quality versions of the same products you want at prices you cant beat!)
In his own way, Ma is asking an existential question about what is means for a brand to have value beyond the raw materials and workmanship of its product. If a consumer knows that two bags are identical in quality, why exactly is the one stamped Prada worth a thousand dollars more than the one stamped Proode? Its not an easy question to answer for the*Chinese consumers whod like their Proode to look like a Prada bag at 20 paces, but at one-twentieth the cost.
Chinese consumers are highly knowledgeable on the ins and outs of counterfeit products, and are very astute at detecting counterfeits by scrutinizing even small details, Renee Hartmannh, Co-Founder of China Luxury Advisors, tells brandchannel. Chinese customers who are seeking to purchase authentic products will not be swayed to buying a counterfeit product. However, it is likely that customers who purchase authentic products will also purchase high-quality off-brand knockoffs in addition to authentic products.
For customers seeking to display*status, they will focus on authentic productsnot fake branded goods, added Hartmannh. Its important for luxury brands to understand the consumer mindset toward both branded counterfeits and off-brand knockoffs for their specific products, and to assure customers of their product authenticity. And most importantly, brands need to focus on ensuring that their products are aspirational and that customers want to demonstrate their status by wearing their brand.
Sounding a warning bell for*brands, Ma framed*his brand vs. counterfeit quality stance*not simply as one about IP but one of a global culture clash. In the wake of the suspension, Mas statements may be interpreted as a threat to brands and a battle*for the very soul and definition of intellectual property as its defined in the West.
As Ma added in his speech at Alibaba HQ, The way of doing business has changed for the brands. Its not the fake products, its not the IP that is destroying them. Its the new business model thats revolutionized the whole world.
The companys founder and chairman cant afford to alienate brands or let the issue of counterfeits hinder growth, as he*aims*to make Alibaba the worlds fifth-largest economy (and serve two billion people) by 2020, which means reaching beyond Chinas population of about 1.36 billion and more than doubling its latest*fiscal years total GMV of $463 billion.
Besides*e-commerce, Alibabas growth strategy includes Aliyun, its cloud computing and big data unit, as Ma and his team argue that its not a retail, service or sales company but a data platform. Still, retail is the cornerstone of its business.
Hes also*tying Alibabas growth to Chinas longstanding gripe that the nation that makes all the luxury goods gets criticized for making poor-quality Chinese branded goods. Hes deftly twisting the counterfeit issue into a nationalist debate*about cultural valuation.
Its an argument that will*certainly win Ma some allies and fans in an ambitious and rising China. In some ways, Mas positioning on brands may mirror a China that is increasingly more comfortable rewriting rules*that the West has long assumed were not up for debate.
As TechCrunch notes, In addition to Southeast Asia, Alibaba is also eyeing India and has made major investments in e-commerce companies like Paytm. Alibaba has struggled to establish a foothold in the US, however (its Amazon competitor, 11 Main, closed in June 2015 just one year after it began operating). Despite opening data centers in the US, Aliyun is likely to run into similar problems as it goes up against AWS, Microsoft Azure, and Google Cloud.
Most of all, Alibaba must fight its reputation as a free zone for counterfeiters if it wants to win and retain customers beyond China and reassure US and Chinese officials that it will protect IP.
To that point, Ma claimed during his speech last week that Alibaba is the worlds leading fighter of counterfeiting and that its anti-counterfeiting measures have put 700 people in prison over the last three years and led to the closure of millions of shops.
And yet, Ma argued, fighting against knockoffs is fighting against human nature. Whats more, he added,*Alibaba is a victim of counterfeiters too because for every fake product sold on its platform, Alibaba loses five customers.
I promise that we are more and more confident than ever that we can solve the problem. We cannot solve the problem 100 percent because we are fighting against human nature, Ma said. But we can solve the problem better than any government, any organization, anyone in the world.