Fashion Market: Ali Express

Part
01
of one
Part
01

Ali Express Counterfeit Items

6% of the products sold in AliExpress are counterfeit products. Counterfeit items produced by Ali Express have damaged other fashion branded companies such as Gucci, Saint Laurent, Little Dude N Dudette, and Ospina.

PERCENTAGE OF ITEMS THAT ARE COUNTERFEIT ON ALIEXPRESS:

  • According to Counterfeit Report, 6% of the products sold in AliExpress are counterfeit products.

OVERVIEW OF HOW THEIR COUNTERFEIT ITEMS ARE DAMAGING OTHER COMPANIES IN THEFASHION MARKET:

  • Ali Express is Alibaba’s online consumer marketplace for international buyers. Alibaba allows small businesses in China to sell to customers all over the world.
  • The products that are sold on AliExpress are comparatively cheaper than other fashion brands because customers are buying directly from the manufacturer, which reduces the cost of selling to the customer, and because some of the items are either counterfeit or fraudulent.
  • Ali Express list all kinds of counterfeit items in the fashion market such as jewelry and gemstones, purses and handbags, sunglasses, and watches.
  • "Imitation is the sincerest form of flattery", says Jason Brim, of Swedish bikewear brand Void, which spotted fake clothing on Ali Express in 2016 for about one-fifth of the actual price. This lead to fierce pressure on other players as they were expected to lower their prices.
  • Regulators and multinational fashion brands have criticized Alibaba, which saw 288% year-on-year revenue growth in its international commerce retail business in the last quarter of 2016. That rapid overseas expansion is partly due to Ali Express’s fast-growing western consumer base.
  • According to BuzzFeed, Ali Express has a devastating effect on small US businesses like Ospina’s. The owners of the US-based children’s boutiques said their designs have been copied and sold on Ali Express, often using their own photography to advertise them.
  • Similarly, Jennifer Durham, the owner of Little Faces Apparel, has found copies of her photos used by an AliExpress vendor, who was selling a copy of her design as part of a set that also contained replicas of a piece by Lindsey Callinsky, the owner of Little Dude N Dudette.
  • Kering, which owns brands including Gucci and Saint Laurent, sued Alibaba, the owner of Ali Express, over the prevalence of counterfeit goods on its sites in 2015.

ADDITIONAL INFORMATION

  • 85% of the world’s counterfeit goods have its origin in China.
  • Alibaba has led to the seizure of $207 million worth of fake goods in 2018.
  • Globally, the total counterfeiting reached $1.2 trillion in 2017 and is bound to reach $1.82 trillion by 2020.
  • In 2015, Ali Express accounted for 26.5% of all counterfeiting incidents across the 8 examined websites, which translated to 15,508 counterfeit alerts. However, in 2017, the number of individual detections on Ali Express dropped by 13% to 13,632.

Research Strategy:

We began our research by going through media reports such as Makeuseof, LA Times, and Engadget in order to determine the contribution of Ali Express to counterfeiting. We were able to find a number of reports that expressed concerns about Ali Express' lack of oversight over its manufacturers but the exact number of counterfeit items being sold on the site was not mentioned in any of those reports.

We also looked through industry reports such as the Global Brand Counterfeiting Report 2018-2020, the Counterfeit sports merchandise report, and Counterfeit Report in order to determine the % share of Ali Express in the total counterfeit market. While we were able to find some helpful statistics, the total number of counterfeit items sold on the platform was not available. We did, however, find a report that collects cases of users who have suffered from counterfeit products, The Counterfeit Report. The report was able to evaluate the number of fake products based on users report.

Sources
Sources

Quotes
  • "To give you an idea of just how big Alibaba is, they reported over $25 billion in sales on Singles’ Day (November 11) 2017."
  • "AliExpress is Alibaba’s online consumer marketplace for international buyers (while TaoBao is for China). It allows small businesses in China to sell to customers all over the world"
  • "If you browse some of the products on AliExpress, you’ll probably notice right away that many of the prices are really low. Why is this? There are two different distinct possibilities, both of which you’ll find in abundance on the site."
  • "First, there’s the possibility that you’re buying directly from a manufacturer, which reduces the cost of selling to you"
  • "The second possibility for an item being extremely cheap is that its either counterfeit or fraudulent (or semi-fraudulent, as in the case of the GooPhone I5). China is known as a hotbed of counterfeit production, and AliExpress is no exception."
  • "You can get all sorts of counterfeit items there, from electronics to clothing. Some sellers have also been known to defraud buyers by tricking them into paying before they receive an item and then disappearing with the money."
Quotes
  • "The rise of Chinese e-commerce platforms such as Taobao, AliExpress and DHgate has made finding a counterfeit item almost as easy as shopping on Amazon"
  • "One Israeli entrepreneur was shocked to learn his phone case that converts into a selfie stick was copied and sold on Alibaba’s AliExpress only a week after he introduced it on Kickstarter to seek funding, according to Quartz."
  • "Imitation is the sincerest form of flattery, and that’s especially true in the digital age,” said Jason Brim, of Swedish bikewear brand Void, which first spotted fakes of its clothing on AliExpress a year and a half ago for about one-fifth the proper price. "
  • "If they want, those penny pinchers can seek a knockoff Ornot jersey. They’ve been available on AliExpress for at least two years for about $30, a quarter the cost of authentic versions made of Italian fabric, the company said. Ornot filed an initial report with AliExpress in 2015, but the complaint stalled"
  • "Contacted by The Times, Alibaba said it removed 163 listings Thursday on Taobao and AliExpress suspected of violating the rights of Team Dream, Void and Ornot."
Quotes
  • "Company that are a part of counterfeit products include Alibaba and Aliexpress"
Quotes
  • "Regulators and multinational brands have long criticized Alibaba, which saw 288% year-on-year revenue growth in its international commerce retail business in the last quarter of 2016. That rapid overseas expansion is partly due to AliExpress, the company’s fast-growing site targeting Western consumers"
  • "But AliExpress can have a devastating effect on small American businesses like Ospina’s, BuzzFeed News has found. The owners of 29 different US-based children’s boutiques said their designs have been copied and sold on AliExpress, often using their own photography to advertise them."
  • "Jennifer Durham, the owner of Little Faces Apparel, found copies of her photos used by an AliExpress vendor, who was selling a copy of her design as part of a set that also contained replicas of a piece by Lindsey Callinsky, the owner of Little Dude N Dudette based in Portland, Oregon."
  • "The AliExpress vendor, Tong Lok children’s clothing, sells the T-shirt and legging set for less than $7, a fraction of what Durham and Callinsky sell their handmade items for in their shops. Durham’s leggings sell for $32 and Callinsky’s top sells for $26."
Quotes
  • "Alibaba has been battling the perception that it is a marketplace for fakes for years. On Thursday, it made some headway, resolving a dispute with the luxury goods giant Kering."
  • "The companies said they had resolved their differences, and Kering, which owns brands including Gucci and Saint Laurent, said it would withdraw a 2015 lawsuit charging that counterfeit goods had been sold from the Chinese e-commerce giant’s website."