Criticized and even sued by luxury brand Gucci and others for facilitating the counterfeit goods trade, Chinese e-commerce giant Alibaba Group Holding Ltd (阿里巴巴) has been quietly piloting a scheme to try to curb fakes at source.
In the coastal city of Putian, in Fujian Province, Alibaba is working with 17 shoe manufacturers to cultivate homegrown brands online, revitalize a flagging industry and offer would-be counterfeiters an alternative source of livelihood.
Critics say the scheme is misguided and Alibaba should instead focus on scrubbing its online marketplaces of widespread listings of fakes.
However, the “Made in China” plan speaks to what proponents say is one of the reasons why there has been only limited progress in the battle against fake goods in China: A lack of attractive alternatives for those making and hawking goods that infringe on others’ intellectual property rights.
“You can crack down forever and never see an end to it,” said Song Zonghu (宋宗虎), who once peddled counterfeit brand-name sneakers and now runs Shuangwei Sporting Goods Co Ltd (雙威體育用品公司), one of the firms in the Alibaba program. “Creating new opportunities while cracking down is the way to go. Everybody has to eat.”
Alibaba senior director of Internet security Ni Liang (倪良) said the scheme is a key anti-counterfeit initiative this year.
The group plans to expand it to household electronics, toys, bags and other industries, hoping that by building local brands, small manufacturers are more likely to turn away from fakes and serve a legitimate sector.
Putian is the epicenter of China’s high-quality fake sneaker business, a byproduct of a legitimate footwear industry that employs one-tenth of the city’s 3 million people. Copies of Nike Inc, Adidas AG, New Balance Athletic Shoe Inc products and other brand-name shoes made here are hard to distinguish from the real deal, but sell for a fraction of the price.
The municipal government has cracked down on fakes, arresting 156 people and confiscating about 2 million pairs of counterfeit footwear since last year, Putian e-commerce office director Wu Haiduan (吳海端) said. He declined to give an estimate of the overall size of the industry, but a grid of Putian’s sleepy daytime streets near government offices comes alive at night, offering hints as to the scale of the issue.
Hundreds of scooters ferry shoes as runners duck in and out of off-brand storefronts or apartment blocks to fetch more boxes. Sellers check each shoe for blemishes, wielding scissors or cigarette lighters to eliminate stray threads and pencil erasers to clean the foam midsoles. Fake certificates and phony credit-card receipts are tucked in with the shoes.
Curbside courier services then wrap and stack the boxes ready to be trucked out by daybreak.
Alibaba has trained the shoe manufacturers in online business, helped on quality control and marketing, and run sales promotions. In one three-day campaign, the shoe brands sold more than 4 million pairs — or two every three seconds — worth 480 million yuan (US$77.4 million), Alibaba spokeswoman Crystal Liu said.
Sneakers are just the start.
“We’ve received more than 60 requests from other industries,” said Jeff Zhang (張建鋒), head of Alibaba’s domestic retail marketplaces, which include the Taobao (淘寶) and Tmall (天貓) shopping sites.
For most, the hope is that Alibaba can help retool local industry in the face of rising costs and shrinking overseas orders.
“They are all looking for a model that can help them upgrade their local manufacturing,” Zhang said.
Song sees the Alibaba scheme as an economic lifeline, and said the future of his Siweiqi (思威琪) brand canvas shoes, which resemble Converse All-Stars, depends on continued support with sales promotions and exposure.
“What we’ve seen so far is just a signal,” he said.
A sales bump is one thing, but building a successful brand is quite another, said Shaun Rein, managing director at China Market Research Group in Shanghai.
“It is kind of unlikely to be successful, because it is not so easy just to create a brand out of nowhere,” he said.
“For Alibaba, the key is to make a show that they are trying to crack down on fakes,” he said, adding that the company takes a cut on all sales — fake or legitimate.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”