Alibaba is criticized by CCTV and Western brands for its failure to remove fakes from its largest shopping platform 'Taobao' where sellers try to get fake orders to improve their ratings.
After criticizing international companies, ranging from McDonald’s Corporation to Apple in the past years, the powerful state broadcaster of China has targeted Alibaba, pressurizing the Chinese e-commerce company to deal with bogus sales on its trading platforms.
In a two-hour long prime-time broadcast on March 15, 2016, China Central Television said “brushing” or faking orders, as it is known in China, continues to be widespread on the biggest trading platform of the online trading company, Taobao. The practice involves merchants paying people to give fake orders and sales figures of past suppliers to improve their position on online markets.
Spokesman of the Hangzhou based company told that the problem is plaguing online trading sites across the globe. Western brands are also criticizing Alibaba by saying that it is not acting sufficiently to launch a crackdown against counterfeit items on its trading platforms.
Previous week, Jack Ma spoke to hundreds of employees that Alibaba would not spare expense in getting rid of fakes. The company counters by claiming that it uses modern tools to exclude and identify bogus dealings from its financial records. The broadcast has turned into an annual custom representing the growing consumer power in a progressively affluent nation.
The show usually focuses on multinationals, a tactic typically used by China to solve widespread problems inside industries. Three years ago, a report by CCTV resulted in an apology by CEO of Apple, Tim Cook, after it alleged the company of dodging warranty period and implementing customer-service policies for its customers in China that are not practiced in other countries.
This year’s show, nevertheless, spared global companies and took a lighter note against them than in past years. It concentrated on cellular phones, second-hand automobile sales, food-delivery services and e-commerce.
On the show, CCTV criticized Ele.me (backed by Alibaba) for working with unregulated restaurants and substandard kitchens. Ele.me posted on its micro blog, Sina Weibo, to review its business operations and remove all such restaurants from its service.
The broadcast also showed a reporter of CCTV, working undercover, establishing a store on Taobao and enlisting the services provided by brushing companies to improve the ratings of the store, with every fake order and rating costing within the range of $0.77 to $1.54.
Meituan-Dianping, was also called by the show as having bogus transactions. Meituan-Dianping responded that it takes the matter seriously and has been trying for many years to battle with companies that provide services to improve ratings.
In Nov 2014, Xinhua Agency reported that Vice President of Alibaba said the e-commerce organization found 1.2 million vendors on Taobao (approximately 17% of all sellers) had faked half a million transactions valued at $1.5 billion (10 billion Yuan) in 2013.
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