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Published
Dec 22, 2014
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E-commerce: Chinese Taobao to tolerate 24 counterfeits annually by sellers

Published
Dec 22, 2014

The Chinese e-commerce site Taobao is fighting counterfeiting through a point system. Until this year, a seller could continue to operate on the website as long as they didn’t exceed 48 counterfeits per year. For 2015, however, the figure has been reduced to 24, according to the website Ebrun.com.

Taobao.com


The process is somewhat surprising. Taobao records the number of counterfeits sold by each seller annually. Until now, if the number did not exceed 24, then the reset button was hit on December 31. If the number was between 24 and 28, the counter was reduced to 24 on the same date. Sellers had to remain below 48 in order for his or her meter drop to zero the following year. 

If the number exceeded 48, the penalty would be levied: the seller's store would be closed. But this leniency, which hasn’t ceased to amaze Western brands, will be curtailed in 2015. 

Now, exceeding 24 counterfeits annually will result in a store’s closure. It remains to be seen how effective the system will be, especially since Taobao has not indicated how it will prevent fraudulent sellers from returning to the site under another identity. 

Taobao is at the top of Hurun’s ranking of the most valuable Chinese companies, which is dominated by physical and online retailers. Above Taobao and its sister site Tmall, the company Alibaba generated $5.75 billion (£3.68 bn) in sales last year. 

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