Regulator releases damning report on Alibaba over fake, substandard goods on Taobao

Regulator releases damning report on Alibaba over fake, substandard goods on Taobao

State Administration of Industry and Commerce decided “not to disclose” accusations earlier to “avoid hindering” Alibaba’s record-breaking initial public offering in the US

The war of words between mainland’s largest online shopping site and the state commercial regulator escalated today after the authority released its full report on the failure of Taobao.com to ban substandard products – just one day before its parent corporation, Alibaba Group, releases a financial report.

The war of words between mainland’s largest online shopping site and the state commercial regulator escalated today after the authority released its full report on the failure of Taobao.com to ban substandard products – just one day before its parent corporation, Alibaba Group, releases a financial report.

Alibaba, in return, said on its official Weibo account that it would file a formal complaint to the Administration of Industry and Commerce against the director of its e-commerce division, Liu Hongliang.

The director, in charge of a recent quality survey of products sold on Taobao.com, violated the country’s product quality inspection regulations and imposed a “very serious negative impact on our e-commerce professionals”, Alibaba said.

Alibaba’s latest move came shortly after the administration released on a state-owned news site, People.com.cn, memos from an internal conference meetings between itself and Alibaba in July.

A laptop computer screen displaying the website of Alibaba’s Taobao main site. Photo: AP

The document, dubbed the “Alibaba White Paper”, accused Taobao.com, Alibaba’s largest e-commerce business that has been called a Chinese version of eBay, of allowing merchants to operate without required business licences, to run unauthorised stores that co-opted famous brands, and to sell counterfeit products.

The website’s employees have long turned a blind eye to the flaws raised in customer feedback and internal credit-rating systems, the report said.

It also accused the employees of disclosing the regulator’s confidential report on counterfeit products to the merchants and letting them to remove the products from shelves before the authority could make its next move.

The document was withhold to “avoid hindering” Alibaba’s record-breaking inititial public offering on the New York Stock Exchange, the administration said.

Laws and regulations were fair to every player in the e-commerce market, people.com.cn quoted the regulator as saying. “The executives of Alibaba should know where the bottom line is and avoid being too arrogant,” it said.

On Tuesday, Taobao.com published on its official Weibo account a separate open letter addressed to Liu, which it said was penned by an anonymous employee.

Titled “Don’t make unfair calls, Director Liu. You’ve crossed the line.” The letter accused his department of commissioning an unfair quality survey to pick on Taobao.com.

However, Taobao.com removed the letter down on Wednesday morning.

Commissioned by the administration, the China Consumer Association bought 92 products at random from several online shopping sites and found that more than 60 per cent of products randomly chosen from Taobao.com failed to meet China’s retail-goods standards.

The survey results of the company’s major rivals were much better. 90 per cent of Jingdong Mall’s products and 80 per cent of goods sold on Yihaodian, a Chinese online grocery business controlled by Walmart, met standards.

Chinese officials, including Premier Li Keqiang, have over the past year voiced support for the country’s burgeoning private enterprises, especially in the e-commerce sector.

At least 350 million mainlanders shop online, spending at least 3,000 yuan (HK$3,770) per year, according to official figures.

Additional reporting by the Bloomberg

PUBLISHED : Wednesday, 28 January, 2015, 2:27pm
UPDATED : Wednesday, 28 January, 2015, 11:16pm

#Taobao #Alibaba #JingdongMall #Yihaodian

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Robert Chaen

Global CEO-Founder of ChangeU and Movsha Movers & Shakers, Hero-CEO Whisperer, Writer, The #1 Alpha Change Expert, Father of Asian FireWalking Robert Chaen is an International Keynote Speaker, writer, researcher, and corp games designer. He is famously known to be the “Hero-CEO Whisperer”, 1-on1 coaching with many CEOs and Celebrities for corporate strategies, staff & office political issues, personal branding, and even public figure OSHA safety drilling called Drager Defense. He has transformed CEOs and managers in Coca-Cola China, TVB Hong Kong, Cathay Pacific, Hong Kong Airport Services, VADS, TM, Public Bank, Auditor General's Office Maldives, etc. He is the prolific creator and online Author of innovative management tools such as DragonCEO, Diamond Leader, Papillon Personal Effectiveness, OSHA Drager Defense, KPI Bank, etc. He is also the Founder of Movsha, an international networking with monthly mingles with MOVers & SHAkers, Angels, Entrepreneurs, CEOs, Celebrities, HR-PR-CSR, HODs, and the Most Influential IDEA people. ​Chaen is widely considered as one of the top International Platform Keynote Speakers for Resorts World Genting Senior Management Conference (Manila), 7-Eleven HK, Samsung, Coca-Cola China Mini-MBA @Tsing Hua University, Cathay Pacific, Hong Kong Jockey Club, The Story Conference where he interviewed Datuk Kamarudin (Chairman of AirAsia) and Siti Nurhaliza. He has been widely featured in TVB, AWSJ, CNBC, SCMP, The Star, and Sin Chew. As “The Father of Asian FireWalking”, he coached TVB celebrities (Ekin Cheng Yee-Kin) to walk on 650°C fire; and raised HK$68M in the world’s 1st and only live TV Charity FireWalk (TVB Tung Wah Charity Show), before Tony Robbins even came to Asia. If Robert can get you to walk on 650⁰C fire, he can inspire you to be THE BEST. He champions CN-HK-EU-US Tycoons to be philanthropic, and to be angel investors to support the next generation of Jack Mas, Steve Jobs, Richard Bransons, Steven Spielbergs, or Barrack Obamas. With some slick motivational speakers with fake doctorates out there, graduates often describe Robert to be "the most credible, empowering, truthful Coach" who believe in his graduates to believe in themselves. ​However, clients have described Robert as "The #1 Cool Badass Alpha Change Expert". He has the coolest first class stature, rapport and trust from clients. He will not hesitate to tell the badass truth ever so gently because clients are paying him big bucks to reveal the truth, find solutions, persuade the hostile HODs, and align cross-teams within the organization. Originally based in Hong Kong for 20+ years, he had worked with top Branding/Ad agencies at J Walter Thompson and Leo Burnett, and was a certified FranklinCovey (7 Habits) in USA, and NLP MasterCoach (USA). His warmth is known to soften the most hardened, resistant sceptics. He will inspire your team to Go for Top 1, or to be a Dragon CEO. With boundless energies, Robert owns 15+ successful business Joint-Ventures, and created unique products under his global VC network called Chaen's Angels VC. He is deeply passionate about ChangeUTH Youth CSR, Science-Based Medicine (vs. quackery), short films and Reality TV. Touched by a personal tragedy through the loss of his HK-born Portuguese wife, co-coach and business partner, Brenda José of 18 years, Robert explores the many ways in which the spirit world is communicating with the living with real scientific studies and evidence. He gives inspiring conferences on The Secret Afterlife.

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