While Alibaba is still feeling the heat over counterfeits on its e-commerce platforms, Swatch’s CEO recently turned heads by declaring that the Chinese e-commerce giant’s fake-fighting credentials are actually superior to those of Amazon.
Last week, Swatch CEO Nick Hayek stated that Alibaba is “fighting actively against fakes. This Amazon is not doing,” continuing that Amazon, in fact, refuses “to enter into discussion because they have, I think, 10,000 of lawyers that say, ‘Please, we at Amazon, we should not enter into anything that should force us to fight against fakes.’ The Chinese are doing it. They fight against it.”
The Swatch Group has gotten on board the Alibaba bandwagon in China, at least when it comes to its more affordable brands. Swatch-owned accessible brand Tissot operates an official Tmall store, as does the group’s namesake watch brand. Gartner L2’s Digital IQ Index: Luxury China finds that watch and jewelry brand adoption has been on the rise, growing from 14% in 2014 to 22% in 2017 among brands tracked since 2014. Other watchmakers on the platform include LVMH-owned brands Tag Heuer and Zenith.
Concern about counterfeits is one of the reasons for luxury brands’ reluctance to launch on Tmall, and Alibaba’s C2C platform Taobao was added to the US Trade Representative’s list of “notorious marketplaces” for fakes for the second year in a row in January. Alibaba has been making efforts to respond by hiring more staff dedicated to fighting counterfeits, developing its good faith takedown program, launching its Intellectual Property Joint-Force System, and suing counterfeiters caught selling fake Swarovski watches on Taobao. Alibaba CEO Jack Ma has publicly taken a more hardline stance against fakes over the past year, calling counterfeits a “cancer” at Alibaba’s Gateway event in Detroit last June.
Meanwhile, Gartner L2 has found that Amazon’s sales from third-party sellers have been on the rise, with brands like Michael Kors hurt by angry reviews over counterfeit goods on the platform.
Amazon’s counterfeit problem is not unconnected from the China market. In fact, the proliferation of fakes got worse as Amazon removed barriers for Chinese manufacturers to sell on the platform, CNBC reported.
In the cases of both Amazon and Alibaba, companies are opting to cooperate with e-tailers in hopes of cutting down on sketchy third-party listings. Nike’s cooperation with Amazon yielded a 20% reduction in third-party listings, while Kering terminated a lawsuit against Alibaba over counterfeits in August 2017. The e-tailer and the luxury conglomerate entered into an agreement to cooperate over intellectual property on Alibaba platforms, following in the footsteps of LVMH.