Along with the growing competition in the international market of goods, the dispute over Taobao’s misconducted business behavior. Taobao is an online shopping website operated by Alibaba Group Holding Ltd in China. It has been attempting to nudge into the international market, despite all struggles.
Earlier this year, Taiwan’s Ministry of Economic Affairs has commanded Alibaba Group to withdraw holdings along with a $3,940 fine. It proclaimed that Alibaba was in the violation of investment rules associated with initial public offering. Later this year, Alibaba was forced to cease operations within six months or transfer its holdings with a $7,880 fine by Taiwan’s Investment Commission.
Outside Asia, Alibaba is also facing problems with American Apparel & Footwear Association (AAFA). It has been criticized as a “notorious” market for counterfeit goods, and should be addressed on the government’s list. United States Trade Representative (USTR) has put Taobao on the list of problematic markets for pirated goods for a year, and now it is reconsidering putting Taobao back on the list.
Selling customers pirate goods is an act of deceiving as well as lack of business integrity. For firms, Taobao has been taking unfair advantage from the violation of intellectual property rights. The reason Taobao can still survive in the market with such a notorious name is that, it is supported by a large population of consumers and their enormous purchasing power. Customers can be shortsighted when prioritizing price, thus they do not see the effect of counterfeit merchandising on the economy in the long term. However, Taobao will lose customer trust eventually. So if it wants to strive in the international market, Taobao should fix its operation management by reinforcing the “control” aspect.
