Watchdog Tells Alibaba Fakes Threaten China's Reputation

Alibaba Group Holding Ltd must pay more attention to product quality and step up the fight against fake goods sold online, China's product quality watchdog chief told company executive chairman Jack Ma, according to a statement on Tuesday.

The proliferation of shoddy goods online was a threat to China's reputation, and the ruling Communist Party and government took the issue seriously, Zhi Shuping, director-general of the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), said in the meeting on Monday.

The comments follow a flap last month when the issue of fakes and other illegal business on e-commerce titan Alibaba's platforms came under scrutiny in critical reports from another government regulator, the State Administration for Industry and Commerce (SAIC).

"Quality is the lifeline of the healthy development of e-commerce," a Chinese-language statement posted on the AQSIQ website quoted Zhi as saying in the meeting.

"Regarding the image of Chinese businesses, Chinese goods and made-in-China, Alibaba - as a leading global e-commerce brand - should take itself more seriously, put more emphasis on quality, view quality as its lifeline, create a good image and make big contributions."

Zhi also approved of Alibaba's efforts in seeking support from various parties to combat fakes, the statement said.

For his part, Ma told Zhi that problems with fakes and poor quality goods still existed despite efforts to crack down on the issue, and said he would work with businesses, the government and society to fight fakes, the statement said.

An Alibaba spokeswoman said the company was aware of the report and declined further comment.

In response to the SAIC reports last month, Ma and the head of that body later met to discuss combating fakes, adopting a conciliatory tone after a public row between Alibaba and the regulator. The SAIC also retracted its earlier "white paper" condemning Alibaba's business practices.

Nevertheless, several law firms have said they will take action against Alibaba after the SAIC published information which could concern a possible failure to disclose risk factors to its investors prior to its bumper listing in September.

© Thomson Reuters 2015