AAFA Demands Alibaba Transparency, Speed Against Counterfeiting

Tension between the American Apparel & Footwear Association (AAFA) and e-commerce giant Alibaba Group Holding Ltd. is heating up.

The AAFA announced today that it has sent a letter to Alibaba’s executive chairman, Jack Ma, asking that Alibaba “begin addressing counterfeits in a manner that is transparent, comprehensible, and fast.”

The letter comes after what the AAFA has described as “years of unproductive conversations with Alibaba Group” and complaint letters sent by the AAFA to several U.S. government officials in April.

“We are asking for Alibaba to create a process whereby Alibaba removes counterfeits quickly at the request of certified brands,” wrote AAFA President Juanita Duggan in the letter announced today. “This process must contain four critical elements: easy brand certification, brand-controlled “take-downs,” brand-approved sales, and a transparent verification process with results made public.”

Duggan also called out the executive chairman for comments he made during a U.S. tour in June, in which Ma laid out an ambitious strategy to take Alibaba to $1 trillion in sales in the next five years. That growth will be driven in part, Ma said,  by sales from American small businesses to Chinese customers.

“If Alibaba is successful in this endeavor — without first addressing the systemic presence of counterfeits — then regrettably, Alibaba will succeed in proliferating counterfeits worldwide,” Duggan wrote.

In an email response to Footwear News this morning, an Alibaba spokesperson said the company had not yet received the AAFA’s letter.

“We have not seen this letter and therefore we can’t comment,” the spokesperson said. “However, the Alibaba Group is dedicated to the fight against counterfeits. We work closely with our government partners, brands and industry associations to tackle this issue at its source. We also utilize technology like data mining and big data to scrub our platforms of counterfeits.”

The spokesperson also provided a link to a fact sheet on Alibaba’s anti-counterfeiting policy. Its efforts, Alibaba says, include: an investment of  RMB 1 billion ($160.7 million) from January 2013 through November 2014 to fight piracy, and a task force of more than 2,000 Alibaba employees spearheading the company’s anti-counterfeit initiatives.

Duggan says the efforts are insufficient for the trade association and the 1,000-plus American brands it represents.

“No one understands Alibaba’s process — it is obviously flawed. What Alibaba has in place is slow, unclear, cumbersome, and full of barriers,” said Duggan. “The ultimate metric is whether counterfeits on the sites are permanently removed, and right now, they are not. On any given day, a simple search of a brand will yield hundreds, if not thousands, of results at alarmingly low prices — a giveaway that the products are fake.”

Continue to follow Footwear News as this story develops.

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