Alibaba: This is the world's largest anti-counterfeiting team

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The suspicion of counterfeit goods in Alibaba, triggered by a random inspection report from the State Administration for Industry and Commerce, continues to ferment. Although the State Administration for Industry and Commerce and Alibaba have "shaken hands and made peace", on February 3, a lawsuit filed by investors led by American lawyers once again attracted attention from the outside world.

The question of "fake goods sold on Taobao" has been around for a long time, but this is the biggest round Alibaba has encountered since its listing in the United States. As an e-commerce platform with an annual transaction volume of more than 2 trillion yuan and covering nearly 10 million merchants, would Alibaba allow fake goods to proliferate? How does Alibaba fight against counterfeiting internally?

In this regard, 21st Century Business Herald interviewed Ni Liang, senior director of the Alibaba Group's security department.

“We are preparing to launch offline certification this year”

"21st Century": What is Alibaba's internal anti-counterfeiting mechanism?

Ni Liang: The entire Alibaba system, including Taobao, Tmall, Juhuasuan, etc., will respond quickly as long as there is a complaint from the right holder. Before 2010, we were passive in fighting counterfeiting. If someone complained, we would handle it. After 2010, we took the initiative to cooperate with the right holders. Because the products of various categories vary greatly, we need to face the challenges brought by counterfeit goods together with the right holders, and there are also many right holders willing to cooperate with us.

In the first nine months of 2014, we proactively discovered 110 million counterfeit products. After we discovered them, we immediately removed them from the shelves and punished the sellers. At the same time, there were 8 million counterfeit products complained by the rights holders. It can be seen that Alibaba's proactive management accounts for the vast majority.

At the same time, we are also using big data to fight counterfeiting. For example, if a seller has three stores and one store is dealt with, we will check the other two stores. We also process big data for consumer complaints. For example, we conduct systematic machine semantic analysis on consumer phone complaints, text comments, reasons for returns, etc., extract relevant information about counterfeit goods, and randomly select samples from the goods that are the focus of consumer complaints and submit them to third-party appraisal agencies for appraisal. If they are counterfeit goods, we will deal with them immediately.

The cost of purchasing and identifying counterfeit goods in the Alibaba system exceeds 100 million yuan every year.

21st Century: When merchants sell goods on Taobao or Tmall, the basic steps include opening a store, transactions, and after-sales service. Will Alibaba's anti-counterfeiting efforts run through the entire chain?

Ni Liang: First of all, a person or company must pass real-name authentication to become a seller. In the early days, only Alipay authentication was required, but now real-person authentication is also required. Alibaba has a set of real-person authentication methods, such as requiring merchants to upload photos holding their ID cards.

We are planning to launch offline certification this year and set up an on-site certification window in areas where counterfeit goods are relatively concentrated. This is the management method we are about to promote.

Then, when it comes to product release, we will use the intelligent system to evaluate. Once an abnormality is found, a pop-up window will be used to remind the seller that your product may be fake. But there is a prerequisite: the brand must be recognized by us, because there are still many unknown brands, and I also hope to expand our ability to recognize them. Alibaba also hopes that brands will cooperate with us and tell us more about their brands.

On the consumer side, once a counterfeit product with a high number of complaints is found, Alibaba will suspend payment for the product. The seller can receive the payment, but the money cannot be transferred. This cuts off the payment flow and the money is frozen in Alipay.

21st Century: What principles does Alibaba follow when punishing merchants? How many types of punishments are there?

Ni Liang: Alibaba cannot simply shut down the store when it finds a seller selling counterfeit goods, because some sellers sell counterfeit goods intentionally, while others sell counterfeit goods without knowing it. In addition, consumers have limited knowledge of authenticity, which needs to be verified. Therefore, Alibaba treats all sellers with education as the main approach, combining punishment with education.

Alibaba implements a point deduction system for merchants. If a seller is found selling counterfeit goods for the first time, a warning will be given; the second time, 2 points will be deducted; if the seller is found selling counterfeit goods for the third time, 24 points will be deducted at once, and the seller will have to suspend business for up to 21 days for rectification; if the seller is found for the fourth time, another 24 points will be deducted, and the seller’s store will be closed. According to the rules, the store will be closed if 48 points are deducted. We have been strictly enforcing this rule.

At the same time, if a brand complains about a store three times, Alibaba will also close the store. Three times is a common rule internationally.

"21st Century": Does Taobao conduct internal supervision based on product categories or in other ways?

Ni Liang: According to the category, the characteristics of counterfeit goods in different industries are completely different. For example, the consumer groups and sales methods of fake sports shoes and luxury goods are different. We conduct in-depth research based on the characteristics of counterfeit goods in different categories and formulate different work measures.

“This is the world’s largest anti-counterfeiting team”

"21st Century": Does Alibaba have a dedicated anti-counterfeiting team?

Ni Liang: Yes, I am in charge of this team. It includes a technical team that develops system modeling, a customer service team that receives consumer complaints about counterfeit goods, and volunteers who buy counterfeit goods. The entire team has more than 5,000 people. It can be said that this is the largest anti-counterfeiting team in the world.

"21st Century": How does Alibaba prevent problems among internal personnel through its mechanisms?

Ni Liang: Every action taken by Taobao shop assistants will leave a trace, which is very helpful in discovering problems and tracing the responsible persons. We tell our employees that they will be responsible for every action they take in the future. In actual work, we have indeed found a "shop assistant" who violated the rules, and the company brought him to court. We will never cover up any behavior that violates the integrity of the platform.

"21st Century": In addition to internal anti-counterfeiting efforts, will Alibaba's anti-counterfeiting team cooperate with external parties?

Ni Liang: We have good cooperation with the Ministry of Public Security, the State Administration for Industry and Commerce, and the Intellectual Property Office. We should face the problem of counterfeit goods together. For example, Alibaba assists the public security organs in cracking down on illegal activities. Last year, Alibaba proactively provided more than 1,000 pieces of information, and finally arrested more than 400 merchants selling counterfeit goods. For another example, in cooperation with the quality inspection department, we will provide which factory has opened a store on Taobao, and then the quality inspection department will intervene directly.

"21st Century": Ant Financial Services Group recently launched "Sesame Credit". In the future, is it possible for the credit of Alibaba's e-commerce sellers to be combined with this?

Ni Liang: This has long been integrated into our internal management system. Whether a seller has sold counterfeit goods or prohibited items in the past, or has an arrogant or bad attitude towards consumers, will all be included in the internal credit evaluation system. If he applies for a loan, these will affect his evaluation.

"Sesame Credit" not only works within Alibaba, we also hope that it can serve the society. By taking the business operations of sellers' e-commerce platforms as part of its credit investigation, it will greatly improve the comprehensiveness of its overall credit and at the same time be conducive to the integrity of merchants' operations.

Helping fakes become legitimate

"21st Century": How do you evaluate the anti-counterfeiting mechanisms of different e-commerce platforms?

Ni Liang: The management difficulty of self-operated e-commerce and platform-based e-commerce is very different and they are not on the same level. On the platform, theoretically, we cannot see the business behavior of the seller. We use big data to analyze whether the seller sells fake goods based on every subtle feature. Self-operated e-commerce can achieve this by managing its own employees and purchase channels.

When we see fake goods being sold and we are clearing them out, we also need to assess another risk: these sellers may come to Taobao to "protect their rights" the next day. I think internal anti-counterfeiting does require a certain level of management skills and wisdom.

"21st Century": Taobao now uses a combination of manual and technical methods to combat counterfeiting. Will there be changes in the future?

Ni Liang: We now use a high proportion of technical means, such as the use of big data. Without technical means, it would be impossible to manage tens of millions of merchants. Our technology will monitor the entire process of each category of goods from warehousing to shelf placement in real time.

"21st Century": What is Alibaba's overall consideration on the issue of counterfeit sales?

Ni Liang: According to Jack Ma, if our website wants to last 102 years, there are three problems that will cause the website to become cancerous and die: counterfeit goods, intellectual property rights, and credit. These are the most important issues for all business modules of Alibaba.

In 2015, we are going to open up a new way of thinking to fight against counterfeiting. As a social problem, we cannot eliminate counterfeit goods by cracking down on them and cleaning them up. Those who produce and sell counterfeit goods may make more money if they switch to producing and selling original brands. We have reached a close cooperation with the Putian Municipal Government of Fujian Province. We hope to guide the local production capacity that used to produce fake Nike and fake Adidas to transform into producing original brands. Alibaba will do its best to help these original brands market better.

At the same time, we and the General Administration of Quality Supervision, Inspection and Quarantine have reached a new consensus on this original project in Putian, which is to promote the branding of these original sports shoes.

I have visited some manufacturers and sellers of counterfeit goods. Their feedback was that they could only make ends meet, and they lived in fear every day. The first thing they did every morning was to check whether their shops had been sealed off.

It can be said that we will raise the fight against counterfeiting in 2015 to the level of changing the outdated production model. In addition to combating counterfeiting, we can also cultivate a group of original national brands and allow them to produce and operate with dignity.