A lawsuit by filed by Alibaba Group Holding Ltd (NYSE:BABA) in Hangzhou West Lake District People’s Court is seeking 2.16 million yuan ($310,000) from Shatui.com. The lawsuit alleges that Shatui connects merchants with people agreeable to forging purchases and writing positive reviews that can drive sellers up Alibaba’s rankings. Given that the reviews are not true, it may have a negative impact on China’s biggest eCommerce operator.
Together with authorities, Alibaba, which has a complicated history in regards to operators, raided Shatui’s office taking away its accounting books for close examination. This occasioned the closure of Shatui.com’s online site and any attempt to access it redirects to another e-commerce website. Meanwhile, calls to the number displayed on the site of Shatui’s parent went unreturned.
Alibaba is trying to stamp out questionable practices
For a while, Alibaba has been in the limelight over counterfeits. But whether or not it has had a direct link to them, a Shenzhen-based analyst at Guotai Junan Securities Co, Ray Zhao outlines, “Alibaba wasn’t as stringent about brushing before its IPO, but it’s really cracked down on the malpractice in the past year.”
As it is now, the company is working towards the expansion of new businesses. Zhao also emphasizes the need for maintaining reliability while at the same time keeping the system healthy. This is one of the many ways that will not only attract larger crowds but also high-quality brands. In any case, a professional network is of the essence to any business.
But Alibaba is not alone in battling fakers
The presence of online counterfeit products has somewhat become a political issue given that Alibaba is not the only eCommerce company that has been hit. Its counterpart, Amazon.com, Inc. (NASDAQ:AMZN) has also fallen victim as well as Facebook Inc (NASDAQ:FB). However, they are all working to stamp out the tricksters. Alibaba says that the use of a range of methods the likes of big data analysis is helpful in spotting and eliminating fictitious transactions. It also helps in tracking irregular activities.
Nonetheless, it is still very difficult to stand out from other merchants given a billion listings on Taobao, a subsidiary of Alibaba. At the same time, it is practically impossible for a newcomer to start a shop on Taobao because they will be brushed out. But there is still hope for those who want to grow if only they put their efforts together to fight the increasing numbers of fake orders. Meanwhile, Alibaba’s stock closed at $88.93 witnessing an increase of $0.26 or 0.29%.
