Page 29 - Forbes India (December 2015)

sociation, an industry group that of our business model as the price of counterfeits pulled from the
represents many brands victimised of collaboration,” wrote Pelletier. site—tens of thousands that day
by Chinese fakes, says her organisa- alone. Other software can compare
tion had been in intensive talks with here’s a war room at Alibaba’s snapshots posted by sellers on their
Alibaba over ways the Chinese com- headquarters, a campus of stores’ sites against official photos
pany could better protect brands, only T glass-and-steel office towers of the original goods in a quest to
to face resistance. “We’ve been going on the outskirts of Hangzhou housing uncover illegal replicas. Shao claims
around and around in circles with 16,000 employees. Three floors down the company removed 100 million
them, and we were going nowhere,” from Ma’s office, a large, flat-panel infringing products from Taobao
Duggan says. Fed up, her group screen shows a map of China, flash in the past year alone, up from 14
wrote the US Trade Representative points popping up every second million in 2010. Ninety percent of
an official letter in April, accusing or two. In a country notorious for those were found by Alibaba’s own
Alibaba of being “either not capable its cyber-espionage, particularly team, he says. “We are proactively
of or interested in addressing this when it comes to business and trade discovering these problems and
problem”. It’s now campaigning secrets, Alibaba is spying on itself. solving them,” Shao says.
to have Taobao return to the US More specifically, it’s operating Even with advanced anti-fraud
government’s Notorious Markets list. what is likely the largest private task software and 2,000 sets of eyes,
In a letter to the US Trade force in the world devoted to fraud- Alibaba is still playing the world’s
Representative, Alibaba’s vice ulent merchandise—2,000 strong, all biggest game of Whac-A-Mole.
president of international government of them employees of Alibaba, which Some 100,000 new Taobao shops
affairs, Eric Pelletier, responded that spent a combined $160 million in 2013 are approved each day, and Shao
it wants to cooperate with Duggan’s and 2014 on this effort. Head count says Alibaba can’t always know what
trade group but that many of its is up fivefold since 2011. If we’re to they’re up to until they start sell-
demands were “unreasonable and judge Ma by his actions rather than ing. “We are far from perfect,” Shao
unworkable”. Most tellingly, Alibaba just words, this is the place to start. admits. That’s why Alibaba has also
said that acceding to the footwear “If I say no tolerance of counterfeit expanded its war into the real world.
association’s wishes would force products,” he says, “then we mean it.” Two years ago, Alibaba increased its
changes in its business model. “It is Ma’s minister of defence is Polo cooperation with China’s police to
unreasonable to demand that Alibaba Shao, a 20-year veteran of China’s help track down the people making
Group change fundamental aspects police, who excitedly shows off the
“big data” computer system Alibaba iPowER
chRiSTinE uses to sniff out counterfeits. The Apple stock hit an all-time high in April,
LAGARdE map’s flash points denote Taobao and the $234 billion-in-sales company is
Lagarde is a arguably the most important consumer
steady hand transactions based on attributes such electronics company in the world. But
at the rudder as a suspiciously low price, poor photo Cook lacks his iconic predecessor’s
of the world’s quality and the length of the product
economy, and famous “reality distortion field,” and
proved her cool description. Transactions flagged as small cracks are starting to appear in the
during recent suspect get a follow-up look before a house that Steve Jobs built. Critics say
crises like the decision is made to take them down. the company is stalling on innovation,
Greek credit and worry that sales are flagging on new
crunch The system tallies the number products like the Apple Watch.

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