Many counterfeit goods are now of better quality than the real thing, Jack Ma, Alibaba founder, has said, in comments set to infuriate luxury brands which accuse the Chinese ecommerce group of profiting from the sale of knock-offs.
“We have to protect (intellectual property), we have to do everything to stop the fake products but OEMs are making better products at a better price,” Mr Ma said, referring to original equipment manufacturers that typically make products for branded sellers.
“The problem is the fake products today are of better quality and better price than the real names,” he said at Alibaba’s headquarters in Hangzhou. “They are exactly the (same) factories, exactly the same raw materials but they do not use the names.”
The remarks were an apparent riposte to criticism that Alibaba has tolerated the sale of counterfeit goods on platforms such as Taobao. Mr Ma called on brands to accept that the "way of doing business has (been) changed" by the internet, creating opportunities for factories that have supplied the likes of Apple and Louis Vuitton.
LVMH, the luxury group, and Kering, which owns Gucci and Saint Laurent, declined to comment. But the founder of one Italian luxury goods company, who declined to be named, said: "I am stunned by his comments."
Last year Kering launched a lawsuit against Alibaba, alleging that it encouraged and profited from the sale of fakes on its platforms. In May, Alibaba was suspended from the International Anti-counterfeiting Coalition, a watchdog for the retail industry.
Mr Ma also said Chinese groups were impatient with a global division of labour in which they made high quality goods only to see much of the money pocketed by brand owners. Instead, Chinese groups were looking to make products and sell them direct to consumers.
Chinese regulators have periodically probed Alibaba’s counterfeit problems but Mr Ma said he was confident the company’s economic importance insulated it from severe treatment.
Mr Ma later said that his remarks were not intended as a defence of counterfeiters. “This is simply my observation of the issues facing brands and OEMs. Counterfeiting is not a quality problem; counterfeiting is an intellectual property problem.”
(c) 2016 The Financial Times Limited
