Alibaba vows to fight corruption

PUBLISHED : Saturday, 05 May, 2012, 12:00am
UPDATED : Saturday, 05 May, 2012, 12:00am


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Mainland e-commerce giant Alibaba Group has warned there will be no let-up in a crackdown on corruption at online retail unit Taobao.

Alibaba, which is also the parent of Hong Kong-listed, yesterday posted a notice on the Taobao website that called on merchants that used the mainland's leading internet shopping services provider to help in its anti-corruption efforts.

It said some Taobao employees had been caught making 'private deals' with certain online vendors. Offending merchants have been arrested and their online stores on Taobao closed down.

It has been reported that former Taobao employee Zhu Yuehang was detained by police in Hangzhou in April last year for accepting bribes to delete negative consumer ratings for certain online sellers. He was sentenced in November last year.

'The statement was an opportunity to clearly communicate to all stakeholders about our continuing strong position against this type of misbehaviour,' Alibaba spokesman John Spelich said yesterday. 'In the past couple of years, we've come across a handful of incidents like this and we've dealt with them firmly and decisively.'

Privately held Taobao, which was founded in March 2003, consists of three companies. Taobao Mall runs the online shopping portal where international brands and major retailers sell directly to consumers, while Taobao Marketplace is responsible for small consumer-to-consumer transactions, the Juhuasuan group-buying portal and social networking website Taojianghu. The eTao unit provides the online advertising platform and the shopping search engine that helps users scour the internet at large for products and services.

The mainland's total online shopping market is forecast to reach 1.2 trillion yuan (HK$1.48 trillion) this year from 773 billion yuan last year, according to iResearch.

Alibaba has been mending its reputation and rebuilding customer confidence in its operations since an internal probe of last year revealed that more than 2,300 sellers used the business-to-business e-commerce platform to defraud global buyers.

It also found 100 sales personnel - out of a total 5,000 - and some sales supervisors negligently or intentionally allowed fraud in's authentication and verification measures, which led to buyers suffering losses from trading with these fraudulent sellers.

The findings prompted Alibaba. com chief executive David Wei Zhe and chief operating officer Elvis Lee Shi-huei to resign.