Alibaba sues website over fake sales records to boost merchants’ ratings

E-commerce giant moves against website as earlier administrative penalty ‘not enough’ to deter ‘brushing’ activities

PUBLISHED : Tuesday, 06 December, 2016, 10:48pm
UPDATED : Tuesday, 06 December, 2016, 10:57pm

E-commerce giant Alibaba Group has sued a technology website in the People’s Court of Xihu district in Hangzhou for faking sales records for online vendors, Xinhua reports.

Alibaba had sued for 2.16 million yuan in compensation over hurting market competition order, according to Xinhua.

High sales volumes and good reviews helped online vendors move up in search results and attract shoppers on Alibaba’s platform. Many vendors turn to agents such as Shatui who operate online storefronts to fake orders for merchants.

On April 5, the Market and Quality Supervision Commission of Hangzhou had cracked down on over fake orders that helped merchants improve their sales volume on e-commerce platforms, including Alibaba, the report said.

Authorities fined the operators of the website 100,000 yuan for making profits of 2.16 million yuan from the artificial sales since last year.

According to mainland media, merchants wired the agents money to cover the purchase price plus a fee. Using that money, the “customer” then ordered the product and the vendor would ship an empty box or things of little value to them, thereby completing the transaction and allowing the “customer” to write a positive review for the vendor. Such “customers” were called “brushers” in the mainland.

Xinhua quoted an Alibaba representative as saying: “Such an administrative penalty apparently could not penalise effectively the ‘brushing’ activities. Consequently, Alibaba filed for civil action within the framework of the law against the operators of such illegal websites of faking orders.”

Alibaba filed for civil action within the framework of the law against the operators of such illegal websites of faking orders
Alibaba representative

On October 25, seven ministries - including the National Development and Reform Commission, the Ministry of Public Security, the General Administration of Quality Supervision, Inspection and Quarantine and the Cyberspace Administration of China - jointly launched a campaign against the act of “brushing”.

Since Alibaba’s Tmall and Taobao sites account for about 80 per cent of the overall online retail volume in China, “brushing” also casts scepticism on China’s official e-commerce statistics.

Alibaba’s 24-hour Singles’ Day shopping blitz on November 11 – the world’s biggest retail event, surpassing Black Friday in the United States – topped 120.7 billion yuan (HK$136 billion), a 32 per cent rise on last year’s sales.

More than 82 per cent of the sales were conducted through mobile devices, with purchasers using smartphones for 99 billion yuan worth of deals, according to Alibaba’s live data.

In May, The United States Securities and Exchange Commission requested documents and information on a logistics firm with close ties to Alibaba over its accounting practices and how it reports the data from its blockbuster Singles’ Day sale.

Alibaba owns the South China Morning Post.