China Watch Blog

China Watch Blog has learnt that Alibaba Group Holding Ltd, China’s biggest e-commerce company, plans to step up efforts to fight counterfeiting, which the company head says is the biggest obstacle for its future development.

China Daily reported that the Hangzhou-based company will spend “as much as it can” to tackle counterfeiting problems on its e-commerce websites, said Shao Xiaofeng, Alibaba’s chief risk officer.

The company will set up a committee for intellectual property rights protection this year, which will have Lu Zhaoxi, its new CEO starting on May 10, as head and Alibaba’s different business division leaders as members, Shao said.

The effort came after the company was removed from the United States’ yearly list of the world’s most “notorious markets” last year because of its improvement in reducing counterfeits.

“I am afraid that something we notice but don’t prevent today will eventually grow into a cancer for a company’s future development. … That’s why I think I will surely regret it if we don’t do well in fighting counterfeits,” Ma Yun, Alibaba’s chairman, said at his last news conference before he officially steps down as CEO on May 10.

About 2,000 employees at Alibaba are responsible for protecting intellectual property rights.

Last year, Alibaba dealt with 94 million items that infringed copyrights and handed out punishment 900,000 times, it said.

In the first three months of this year, China’s public security organs have dealt with 3,747 counterfeit cases, which involved a total value of 24.2 billion yuan ($3.91 billion), said Meng Qingfeng, head of the Economic Crime Investigation Department of the Ministry of Public Security.

In December, a report from the United States Trade Representative said that Taobao, owned by Alibaba, “has worked with rights holders to significantly decrease the listing of infringing products for sale through its website, and has committed to continue working to streamline its complaint procedures to further reduce listings of counterfeit products”.

China Watch Blog has learnt that Baidu Inc, China’s largest search engine, will shut its online e-commerce store, Youa, and migrate its users to other platforms.

The shutdown will take effect in May and Youa’s existing merchants will be migrated to Rakuten China and Yaodian100, Baidu said in a statement.

“This should not be seen as Baidu withdrawing from the e-commerce scene. In fact, we are in research and development on a new e-commerce platform product which will suit users better,” Reuters reported, citing a Baidu spokeswoman.

The closure of Youa, which Baidu had set up to rival Alibaba’s popular online shopping site, Taobao, cements Taobao’s position as the leading e-commerce player in China.

Youa failed to gain traction with the majority of online users who preferred to use Taobao to buy and sell goods online. Based on gross merchandise value, Taobao commands more than 70 percent of China’s e-commerce market.

China Watch Blog has learnt that the nation’s largest e-commerce firm Alibaba Group has postponed indefinitely its listing plans for its subsidiaries, China Daily reported, citing a company source.

Alibaba Group, which is 40 percent owned by Yahoo, owns China’s largest consumer e-commerce platform Taobao and its largest e-payment system, Alipay.

Alibaba Group’s Chairman Ma Yun has reportedly said in an internal e-mail to employees that the subsidiaries are not yet mature enough for initial public offerings.

He added that Alibaba will instead speed up investment on e-commerce infrastructure over the next few years, the China Business News reported Thursday.

A company source confirmed Ma’s e-mail to employees and its content about the postponement of the subsidiaries’ listing plans.

Taobao, one of Alibaba Group’s crown jewels, handled 400 billion yuan ($60.78 billion) in transaction value last year, an Alibaba Group executive said last week. Its valuation is a point of contention between the group and Yahoo.

The group, which dominates the country’s e-commerce industry, announced plans last week to invest up to $4.5 billion over the medium term to build a nationwide warehouse network to boost China’s logistics industry.

China Watch Blog reports that Google Inc has not yet applied to provide Internet mapping services in China, while the authorities have already approved 31 service providers and joint-venture operators as the first group in Mainland China to obtain Internet map service licenses.

Authorities have tightened market access amid worries that booming Internet map services might undermine state security.

The total revenue of China’s online map market rose from 245 million yuan ($36 million) in 2008 to 330 million yuan last year. Baidu, DDMap and Google were the major online map providers in China, and together accounted for most of the market share.

Song Chaozhi, deputy director general of the State Bureau of Surveying and Mapping (SBSM), told China Daily that about 70 to 80 firms had submitted their applications since the bureau introduced a new regulation in May that required companies providing online map and location services in China to apply for approval.

“Although Google has made some initial contact with us, it has not officially submitted an application,” said Song. He noted that the Finnish cell phone maker Nokia was the only foreign firm to have applied.

SBSM on Wednesday granted online mapping licenses to 31 firms, including Nokia, Baidu, Alibaba, Sohu, Sina and Tencent. Companies such as Google and Microsoft, which were earlier reported to have submitted applications, were not granted a license.

Song said on Wednesday that the rights of firms which received a license will be protected by Chinese laws and regulations. But he reiterated that qualified online map service providers were required to keep servers that stored map data inside the country and must have no record of information leakage in any form over the past three years.

He also disclosed that Google would send a senior executive to China this week to talk with the bureau about the licensing issue.

Alibaba, China’s largest e-commerce company,  has officially started on Monday the operation of its English-language platform AliExpress, in an effort to globalize its brand. The launch of AliExpress, an English e-commerce platform that supports smaller quantity orders, instant online transactions and an escrow service to protect buyers and sellers, is aimed at the US market. “AliExpress has being doing well since its trial operation starting from September 2009, and has fought into the top three of international online trade platforms,” said David Wei, chief executive officer of Alibaba. Obviously, this will to some degree produce more business for forwarders.