Alibaba Group Founder and Executive Chairman Jack Ma is out to set the record straight. Despite backlash from major global brands that claim Ma hasn’t done enough to keep counterfeit goods off his e-commerce sites, Ma says that Alibaba has “zero tolerance for those who rip off other people’s intellectual property.”
In a nearly 650-word op-ed for the Wall Street Journal, Ma set out his defense of the company and his recent comments that claimed counterfeits are “better quality” than authentic luxury goods:
“The problem is that the fake products today, the make better quality, better prices than the real products, the real names,” said Ma. “It’s not the fake products that destroy them, it’s the new business models.”
The statement, made at the company’s first-ever investor day last week, enraged global brands, which have pressed Alibaba for years to better target fake goods for removal from its sites. Alibaba (BABA) has fielded criticism over its failure to fight counterfeit goods not just from high-end brands but from foreign governments and even China’s own government. The U.S. Office of the Trade Representative even issued a warning to Alibaba that said it must upgrade its anti-counterfeit process or possibly risk going back on its “Notorious Markets List.” (Taobao, one of Alibaba’s sites, was on the list from 2008 until 2012.)
Ma, however, said his comments were taken out of context, saying what he shared was simply an observation of current manufacturing and economic trends, not an implicit approval of the practice. He said that Alibaba runs on a culture of trust and that the company is “100% committed to leading the fight against global counterfeiting, online and offline.” For every single takedown company request received, the company has proactively removed eight thanks to heavy investments in technology and staffing for its anti-counterfeit work, he said.
The assurances came couched in a larger examination of Chinese manufacturing trends that seemed to gloss over the larger responsibility these factories play in the flood of fake goods. Ma said that declining orders from Western brands have left many factories underutilized despite their investment in equipment and people, thus “they must find new ways to adapt.” Combined with easier and cheaper distribution networks, i.e. sites like Alibaba, these firms have been able to market their own products directly to consumers.
“What I said last week was that these trends may challenge the business model of some established brands. That’s reality,” wrote Ma. “I see it as my responsibility to tell them that the world is changing. The internet has enabled consumers to assert their preferences more than ever, and thus businesses must innovate.”