Counterfeit Products Raise Red Flags for Alibaba IPO
Los Angeles, CA, May 16, 2014 – “Too little and too late” is the appropriate response to the Wall Street Journal’s article featuring Alibaba’s newest claims to deal with counterfeit products on its websites.
Alibaba, the arguable leader in the proliferation of counterfeit and pirated products, disclosed new anti-counterfeiting efforts to ramp up their image for their upcoming IPO seeking $15 billion from US and global investors. However, fewer than two dozen brands have bought into a program that requires a $9,900 “fee” from brand owners to expedite the removal of infringing counterfeit listings. So far, only a few hundred listings have been removed for the brand owners who signed up says the International Anti-Counterfeiting Coalition (IACC) – hardly a dust spec in the avalanche of 115 million suspected counterfeit listings identified in the first nine months of 2013.
Alibaba, which controls about 80% of China’s e-commerce trade reported $6.5 billion in 2013 revenue and nearly $3 billion in profit for the first 9 months of 2013 (fiscal year ends March 2014). Yet, Alibaba spent only $16 million (.5%) in removing counterfeit products; that’s about .09 cents per counterfeit listing in 2013. How many removed listings were then simply re-listed?
China produces about 80% of the world’s $1 trillion in counterfeit and pirated products; the effects of counterfeit products are substantial and grave. The US economy loses 750,000 jobs and $250 billion to counterfeit products, with the International Chamber of Commerce (ICC) reporting 2.5 million global jobs lost.
Will investors miss the red flags? Alibaba’s prospectus warns that “we may be subject to allegations and lawsuits claiming that items listed on our marketplaces are pirated, counterfeit or illegal” recognizing the implementation of further anti-counterfeiting measures could result in substantial added costs, lower or discontinued services.
Overlooked in championing the Alibaba IPO, is the Office of the U.S. Trade Representative identifying and listing Alibaba.com (removed in 2011) and Taobao.com (removed in 2013) on their “Notorious Markets” Report which identifies select online and physical marketplaces that reportedly engage in and facilitate substantial piracy and counterfeiting.
The Alibaba IPO is a big deal and buyer beware; the back door to China counterfeits has been open for years, but embracing this IPO and injecting $15 billion of "funding by investor" will open the floodgates.
Website: www.TheCounterfeitReport.com
Facebook: https://www.facebook.com/pages/The-Counterfeit-Report/131568053660579
###
 |
