Alibaba Group Holding Ltd (BABA)’s Counterfeit Product Identification Cost Retailer $161 Million Since 2013

Alibaba Group Holding Ltd (NYSE:BABA)

One of the recent updates from the world’s largest e-commerce company, Alibaba Group Holding Ltd (NYSE:BABA), disclosed that the company has spent over $161 million in its fight against counterfeit products on its websites. The ecommerce giant has pushed for more scrutiny to identify fake goods in the recent years.

The online retailer has spent a considerable amount of money in its efforts to prevent counterfeit product manufacturers from entering its portals. Jonathan Lu, Executive at Alibaba Group Holding Ltd (NYSE:BABA), said,

“From Alibaba Group’s perspective, we bear a serious responsibility in this fight against counterfeits.”

These practices have scaled up in the recent years considering the IPO prospects, which was the largest IPO in U.S. history.

Alibaba Group Holding Ltd (NYSE:BABA)

The company is concerned about the impact of fake product sales on its American customers, investors, and retail partners. It is an excellent effort from the company considering that the fact it was listed as a “notorious maker” in the list of the U.S. Trade Representative a few years ago because of some intellectual property infringement cases. However, fakes are still a major problem in China for all the major online retailers.

Earlier, the Tmall Global portal from Alibaba Group Holding Ltd (NYSE:BABA), aimed towards international retailers and merchants, has shown slackening growth in recent months. A recent report has revealed that up to 70% of the stores on the platform are not generating any revenue whatsoever. Some of the primary reasons for the failure of Tmall Global are Alibaba’s practices that don’t allow advertisements from international retailers. Secondly, orders made on the platform have higher shipping costs and require more time for delivery.

As of now, Tmall Global have over 5,400 brands and each of these brands pay annual fees of up to $10,000 along with a 3-6% commissions on every product sale.

The shares of Alibaba Group Holding Ltd (NYSE:BABA) are trading at $105.52 with current market cap of $268.92 billion.

This article has been written by Prakash Pandey.

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