China’s online giant Alibaba would “rather lose than settle” Gucci’s counterfeit claim

Alibaba founder Jack Ma has said recently that there is no chance of a settlement with French luxury firm Kering SA, the Paris-based company, which owns Gucci and Yves Saint Laurent.

Kering SA filed a lawsuit against Alibaba in May in New York's Federal Court, accusing the Chinese e-commerce giant of "turning a blind eye" to counterfeit goods being sold on its online shopping platform Taobao and not stopping them. They also blamed Alibaba of assisting and profiting from the sales of the forged goods.

The Chinese e-commerce firm, however, said they would rather lose the case than settle and admit wrongdoing, in order to maintain its reputation.

"I would [rather] lose the case, lose the money, [in order to] gain our dignity and respect," Forbes quoted Ma as saying.

Talking to Chinese business website Caixin.com on Monday, Alibaba said they have detailed procedures concerning the crackdown on counterfeit products, but "some brands" are uncooperative, which hampers the process to eliminate them.

Furthermore, Alibaba's definition of some "fake goods" is different from Kering's. For example, some goods sold by individual merchants on Taobao are not really 'fake' but 'left-overs' manufactured in Chinese factories but not sold officially due to quality and other issues.

An unnamed employee from Alibaba told Caixin on Monday, "We have strict regulations on opening online stores. But what the shop owners sell [later on] will only be examined by sampling. We will take the suspicious products for brand identification, but some brands are not cooperative, which affects our ability to handle the problems."

This is, however, not the first time Kering has accused Alibaba of allowing counterfeit goods to be sold on its platform. In July last year, it filed similar allegations but that case was soon resolved after the two sides agreed on a more cooperative approach to solve the problem.

Alibaba has actually reinforced cooperation with big brands from China and abroad since 2011 to eliminate counterfeits. Due to these efforts, the US Trade Representative removed the company from the list of most "notorious markets" for fake goods, but also urged for more management and supervision to stop it being put back on the list.

Win or lose the current case with Kering, the e-commerce giant may have other concerns on its mind. Tomorrow ushers in the annual Singles' Day big sale that falls on November 11 each year. Widely seen as a Chinese equivalent of the Black Friday, the Singles' Day shopping spree helped Alibaba book a record 9.3 billion U.S. dollars last year.

AbleMoJah® Nigeria.