Alibaba Group is spearheading a group effort to combat product and intellectual property counterfeiting with data and analytics. The Big Data Anti-Counterfeiting Alliance aims to drive industry collaboration and promote the use of technology in the global fight against counterfeits, Alibaba says.
The initiative includes the China-based e-commerce behemoth’s global business-to-business marketplaces Alibaba.com and 1688.com, a spokeswoman says, as well as its retail marketplaces serving Chinese consumers, Tmall.com and Taobao.com. Alibaba.com is a global marketplace; 1688.com caters to suppliers and buyers within China.
Including Alibaba, the Big Data Anti-Counterfeiting Alliance initially will have 20 members and so far the list includes smartphone manufacturer Huawei Technologies Co. Ltd., candy maker Mars Inc., luxury apparel and accessories brand Louis Vuitton, electronics manufacturer and retailer Samsung Electronics Co., jeweler Swarovski, and support from unnamed government bodies and law enforcement agencies in China, Alibaba says. The manufacturers were chosen from among Alibaba’s Good Faith companies, those that have submitted many “takedown” notices regarding counterfeiters, an Alibaba spokeswoman says.
“The most powerful weapon against counterfeiting today is data and analytics, and the only way we can win this war is to unite,” says Jessie Zheng, chief platform governance officer at Alibaba Group.
The alliance plans to pool resources and increase collaboration to promote a “safe and healthy global e-commerce ecosystem where brands are protected from IP [intellectual property] pirates,” Alibaba says.
Alibaba will provide alliance members with data and advanced technological support in their intellectual property enforcement efforts, including helping to block, screen and take down fake product listings. Alibaba has more than 1 billion product listings across its platforms at any given time, and the company says its monitoring system scans more than 10 million product listings per day. In the 12 months ended in August 2016, Alibaba says it removed more than 380 million product listings and closed down 180,000 third-party seller stores.
Brands and other members of the alliance will share their expertise on intellectual property authentication and anti-counterfeiting data with Alibaba. “This data integration will enable Alibaba to provide leads to brands and law enforcement agencies for offline investigations and prosecutions,” Alibaba says. In the 12-month period ending in August such leads helped close about 675 counterfeit operations.
Some observers say the use of analytics could help fight counterfeiting, but there are many variables influencing the problem. And the proof is in the pudding, they say.
For example, eBay has taken similar actions in the past with its Verified Rights Owner program with mixed results, says Andy Hoar, principal B2B e-commerce analyst at Forrester Research Inc. And Alibaba’s counterfeit goods problem is much bigger, he says. “But battling fraud is a ‘whack-a-mole’ process,” Hoar says. “New counter-measures simply create fraud innovation. Using analytics to battle it is an intriguing new approach, but as is the case for all of these anti-fraud initiatives, the only proof that it succeeds is that it has actually succeeded and quantitatively driven down the rate of fraud.”
The use of analytics and the participation of large manufacturers could help stem the flow of counterfeit goods if all parties are willing, says Jeff McRitchie, vice president of marketing at Hillsboro, Ore.-based MyBinding.com, a company that sells equipment and materials for binding and laminating paper reports.
“If Alibaba is truly interested in curbing the sale of counterfeit goods through their platforms then this could be somewhat successful,” McRitchie says. “However, in the past Alibaba has made claims that they are cracking down on counterfeiting but there has been little evidence on their marketplaces. The success of this will also depend on true cooperation from Chinese officials who in the past have been slow to crack down on counterfeit goods.”
There is additional evidence Alibaba is moving ahead with its crackdown on counterfeits. Alibaba this month sued two vendors it accused of selling counterfeit Swarovski watches on its Taobao website, just weeks after U.S. regulators labeled Alibaba a haven for knockoffs. Amazon Inc. in November took similar legal action for the first time against vendors it said were selling fake products on the Amazon marketplace. Amazon’s B2B marketplace, Amazon Business, is No. 104 in the 2017 B2B E-Commerce 300.
Alliance member Mars looks “forward to continuing to working with Alibaba and others to break the supply chain of counterfeit goods, and create an environment where counterfeiters can no longer hide,” says Scott Thompson, general counsel of marketing properties.
Alibaba plans to incorporate members’ feedback and suggestions to enhance its existing anti-counterfeiting detection algorithms and machine-learning capabilities. The alliance will publicly disclose its anti-counterfeiting progress and results on a regular basis, Alibaba says, but did not provide a timetable.
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Bloomberg News contributed to this report.