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Alibaba

In today’s internet-driven world, businesses must learn to innovate and adapt to consumers’ changing needs

Jack Ma says Alibaba will not tolerate fake goods and is working hard to support manufacturers who invest in their own brands

PUBLISHED : Thursday, 23 June, 2016, 12:55pm
UPDATED : Thursday, 23 June, 2016, 12:55pm

Increased scrutiny is part of becoming a global company. When Alibaba went public in 2014, I told our customers, employees and investors that what we had earned was trust – in myself, my team, and our company’s mission, vision and values. With that trust comes great responsibility. So when I see reports in the press taking my recent words about counterfeit goods out of context, I feel compelled to set the record straight. This is my responsibility to all of our stakeholders.

What I shared with our investors last week was an observation: that the dynamics between some brands and their manufacturing partners, and brands and their customers, are shifting due to economic and technological developments.

These trends may challenge the business model of some established brands. That’s reality

First, Chinese manufacturers face declining exports because demand from Western markets is not what it used to be. Every day, I see small businesses in China suffer because orders from their long-time customers are half of what they once were. Yet these businesses have made investments in factories, equipment and people. They must find new ways to adapt to this changing environment.

Second, the internet has given consumers ever-increasing access to products without the need for complex and costly distribution channels. Manufacturers in China are increasingly using the internet to tap into the vast domestic market. Many of these firms have developed their own online-only brands with quality products for Chinese consumers.

What I said last week was that these trends may challenge the business model of some established brands. That’s reality.

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I want to let you know where I stand on this: counterfeit goods are absolutely unacceptable, and brands and their intellectual property must be protected. Alibaba is only interested in supporting those manufacturers who innovate and invest in their own brands. We have zero tolerance for those who rip off other people’s intellectual property.

There are no easy or short-term fixes, because it is a battle against human greed

Failing to protect original designs, trademarks and technology is akin to thievery, and it is detrimental not only to innovation but also to the integrity of the marketplace. We do not and will never condone any act of stealing.

Alibaba is 100 per cent committed to leading the fight against global counterfeiting, online and offline. We have devoted an unparalleled level of technology, capital and people towards our anti-counterfeiting work. Our robust data processing and analytics enable real-time scanning of over 10 million new product listings a day, looking at product attributes such as trademark, pricing, geolocation, buyer and seller identity, consumer feedback and more. For every one take-down request we receive from a brand, we have proactively removed eight.

Let’s not forget that this is a long-term crusade. There are no easy or short-term fixes, because it is a battle against human greed.

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At Alibaba, we have built the world’s largest platform that enables more than 10 million merchants and brands to directly engage with hundreds of millions of consumers. Brands embrace our platform because consumers love our marketplaces.

We work hard every day to protect our stakeholders and ensure that consumers are not hurt by shoddy fake products. We are committed to fighting the root causes of infringement and to protecting creators and innovators. And we not only comply with laws and regulations but also actively assist law enforcement in cracking down on counterfeiters.

We do all of this because we care about the sustainability of our business. I’ve been around long enough to know that authenticity is the only thing that sustains one’s character and maintains trust in the long run. I’m interested in telling the truth rather than glossing over difficult subjects.

Alibaba always stands ready to partner with brands. As such, I see it as my responsibility to tell them that the world is changing. The internet has enabled consumers to assert their preferences more than ever, and thus businesses must innovate. The good news is that we have an opportunity to work together with brands to get ahead of these new trends.

Jack Ma is the founder and executive chairman of Alibaba Group, which owns the South China Morning Post