Alibaba Faces Challenges in Fixing Counterfeit Problem

BEIJING — As Alibaba faces continued criticism from regulators in China and the United States over its business practices, analysts say it could be challenging for the e-commerce giant to overcome some problems, particularly what appears to be an endemic presence of counterfeits and gray-market products on its consumer-to-consumer marketplace platform, Taobao.com. The platform is renowned among Chinese shoppers for its vast array of goods for sale, ranging from pets to fake college diplomas and counterfeits, or very close replicas, of fashion brands. “It is very hard to eradicate the problem,” John Fang, an analyst with the Shanghai-based China Market Research Group, said, adding that heightened scrutiny could be related to China’s slowing economy, which expanded 7 percent year-on-year on the first quarter, the slowest growth in six years. In March, retail sales rose at the slowest pace in nearly a decade. “The brands are hurting,” Fang said. “It is very hard to do business in China right now, so if the fake products are out there, it is making business even more difficult.” Torsten Stocker, greater China partner at A.T. Kearney in Hong Kong, said it will be “difficult” for Alibaba to eradicate goods on Taobao that are blatant counterfeits or products that

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