Taobao's Campaign against Online Piracy 'Hugely Important'

"It's hugely important for them. They'll build their brand and trust."

Taobao.com, China's leading business-to-consumer website, announced that it plans to launch a major campaign to stop online piracy and counterfeiting.

The move of Taobao to crack down on online piracy and counterfeiting is of great importance to the Chinese e-commerce giant, an expert with China Market Research said Wednesday.

Taobao.com, China's largest B2C (Business to Consumer) platform, announced Monday it will launch a major campaign to stop online fraud. The plan, according to the website, will be joined by 89 international brands including LV, Gucci and Apple.

Taobao's move came after the site was labeled as a "notorious market" by selling products that violate intellectual copyright protection.

Last year, it deleted more than 5.7 million products involved in copyright infringement. However, while acknowledging the website's efforts, the Office of the United States Trade Representative was still not satisfied with the results.

In a February report entitled "Out-of-Cycle Review of Notorious Markets," the agency listed Taobao as one of the online retailers that "exemplify key challenges in the global struggle against piracy and counterfeiting."

Benjamin Cavender, associate principal with the Shanghai-based China Market Research, said the online copyright protection campaign will help Taobao to counter the recent negative publicity, and build their brand and trust in China's e-commerce.

"It's hugely important for them. They'll build their brand on the idea that Chinese consumers can trust them to deliver a safe product, to be a safe place to shop. One of the issues is that Taobao is such a large part of the Chinese B2C internet.

They control roughly 80 percent of the sales, and actually run the platform, which is where a lot of their brands actually do their e-commerce sales. So it's very important for them to get this right."

In addition to efforts from their sellers, Chinese authorities were also advised to get more involved in e-business regulation, said the expert.

As the nation with the largest population in the world, China's internet users reached 457 million by the end of 2010. More than 35 percent of them have used the internet to buy products.

Statistics from the Ministry of Public Security show that 3,001 people involved in IPR violation cases have been arrested since last November for producing and selling counterfeit goods or spreading pirated videos and software online.

Cavender said that the government's action against online piracy has taken effect by helping consumers protect their rights. However, it takes time to achieve better results.

"They've started to require sellers on major platforms like Taobao to actually use their real names, and prove they're who they say they are, so the consumers have more recourse in case of something happening, like fake products.

Doing a lot more work with oversight to make sure that products are really what they are said to be. The issue is that it's just very hard to police .We're seeing more regulations but it's going to take time."