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Are Counterfeit Items Of Superior Quality When Compared To The Genuine Article?

Are Counterfeit Items Of Superior Quality When Compared To The Genuine Article?

Counterfeit items are a low quality knock-off of the original. Or are they?

According to Jack Ma, Alibaba Group Holding Ltd (NYSE: BABA)'s founder and chairman, counterfeit goods made in China are of superior quality. Bloomberg quoted the executive as saying during an investor conference on Tuesday that many factories in China that manufacture high-end goods are now using Alibaba's own platform to sell their counterfeit products to consumers.

However, in most cases, the counterfeit goods being sold are not branded with the designer's high-end name. Nevertheless, it is a product from the exact same factory and using the exact same raw materials and manufacturing process.

Related Link: Baird Analyst Previews Alibaba Investor Day

"The problem is that the fake products today, they make better quality, better prices than the real products, the real names," Bloomberg quoted Ma as saying in Hangzhou, China. "It's not the fake products that destroy them, it's the new business models."

The bigger problem for Alibaba is the fact that global brands rely on Alibaba's e-commerce platform for sales. Naturally, they are not keen on Alibaba also selling a cheaper knockoff on the same platform.

Ma wants to expand Alibaba globally to the point where more than half of the company's total revenue is derived from outside of China. To reach these ambitious goals the company is cooperating with the International AntiCounterfeiting Coalition.

In 2015 alone, Alibaba worked with Chinese law enforcement agencies to arrest 300 people, shut down 46 places where counterfeit goods were made and confiscated $125 million worth of products.

"We cannot solve the problem 100 percent because it's fighting against human instinct," Ma also said. "But we can solve the problem better than any government, any organizations, any people in the world."


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