Luxury Brands Suing as Negotiations with Alibaba are Stalled

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Kering

Luxury brands are sick and tired of counterfeits. So much so, that these brands have come together and they want answers. The companies are targeting Alibaba, as this is the online shopping platform that many luxury brands are having the most trouble with when it comes to counterfeits of their products being sold online and claiming to be them. For those who follow Alibaba, they will know that this is a reoccurring issue that has been happening more and more recently.

Check out the other allegations that Alibaba is suffering, brought on by JD.com, here

Jack Ma, Alibaba founder, and the luxury brands were working together in order to find a solution through meditation. However, a few comments were made by Jack Ma, and the luxury brands decided the time for mediation and talking was over, and they have elected to sue Alibaba.

Luxury Brands Speak Out

Kering SA, which is based in Paris, is the holder of several brands that are a part of the lawsuit. These brands include Gucci and Yves Saint Laurent. The meditation was agreed upon, and everyone was hopeful, until the comment from Jack Ma. In an article published a week ago in Forbes, Jack Ma was quoted as saying:

“I would [rather]lose the case, lose the money…But we would gain our dignity and respect.”

This is his response when asked about settling with the luxury brands. The lead lawyer for the luxury brands stated in a letter:

“It leaves the impression….that Alibaba’s request for mediation was not made in good faith, but rather as a tactic to delay this case and to force Plaintiffs to expend resources spinning their wheels in an expensive and time consuming mediation.”

The head lawyer also stated in the letter that the plaintiffs, being the luxury brand, do not want to knock out the idea of meditation in the future. However, after these comments, feel as though meditation is a waste of time.

The Courts Decision

Though the luxury brands have made it known that they do want to see results with Alibaba and what they plan to do about the counterfeit goods that are being found online, it seems that mediation is going to be the recommended route to continue on. Judge Kevin Castel, after reading both sides of the stories, including the comment that Jack Ma had made, apparently being said before meditation started, he urged the luxury brands to continue with mediation. He stated:

“Needless public comments can undermine talks. Yet public positions and positions in confidential talks have been known to vary…The Court strongly recommends that the parties proceed to meditation.”

It is unclear what the luxury brands will decide to do. There are tons of products that are being counterfeited every day, and this is a huge issue. It is not only undermining the brand, but it is also taking away profit from these companies. For all luxury brands trying to sell on platforms on Alibaba, the hope is that a plan can be put into place to stop counterfeits once and for all.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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