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Ma stokes fakes fire

News, 16 June 2016

HANGZHOU: Just one month after Alibaba told a global anti-counterfeit group how the internet giant was committed to keeping fake brands off its online marketplaces, founder Jack Ma has suggested that many fakes are actually better than the originals.

"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," he told an investor conference at Alibaba's headquarters in Hangzhou.

"The problem is the fake products today are of better quality and better price than the real names," he continued, pointing out that they were often made in "exactly the [same] factories, [using] exactly the same raw materials".

He later clarified that he was not attempting to defend counterfeiting, the Financial Times reported, but rather to highlight the issues facing brands, especially luxury brands which have been vocal about Alibaba's apparent toleration of the sale of fake goods on its sites.

When Alibaba joined the Washington-based International AntiCounterfeiting Coalition (IACC) in April, Gucci and Michael Kors brand ended their memberships in protest, the latter saying Alibaba's presence in the group gave "cover to our most dangerous and damaging adversary".

The IACC subsequently suspended the category in which Alibaba was admitted, effectively terminating its membership.

Michael Evans, Alibaba president, told the group last month that Alibaba's data was key to helping brands fight fraud and insisted: "We have the scale, we have the data and we have the commitment to be a global leader in anti-counterfeiting."

While Ma reiterated this commitment and revealed Alibaba has 2,000 people working on the problem, he added that "The way of doing business has changed for the [luxury] brands.

"It's not the fake products, it's not the IP that is destroying them. It's the new business model that's revolutionised the whole world."

Chinese manufacturers are no longer content to simply churn out products and see western brand owners make huge profits, so they are using the internet – including Alibaba's platforms – to sell products directly to consumers.

Data sourced from Bloomberg, Financial Times, Wall Street Journal; additional content by Warc staff