Food security, counterfeits… Chinese state media fire shots at tech giants & here’re how they response

It has been a tradition since 1991 for China’s state television broadcaster, CCTV, to co-hold an annual gala with government agencies on March 15, World Consumer Rights Day, for the sake of protecting consumers’ rights. The program this year featured mostly tech companies, including the biggest e-commerce site, Taobao, and the food delivery unicorn Ele.me, exposing their acts of infringement and fraud.

Let’s have a look at what Chinese consumers are complaining about and how companies responded to the charges.

Ele.me

Safe and healthy foods are almost like a luxury product for Chinese people. With this in mind, Ele.me, a 7-year-old food delivery startup, was blasted for their food safety standard. Reports allege that this platform has provided food from unsanitary, and even unlicensed, restaurants due to the loose process Ele.me employs to authorize a restaurant to operate and the slack regulations they use.

Ele.me responded through its official WeChat account saying, “Dear consumers, we pay close attention to the problems reported and have formed a new task force to investigate the license validity of all restaurants, and will delist all illegal restaurants.”

On Thursday, Ele.me announced it had delisted 25,761 illegal restaurants. This still didn’t save Ele.me from being singled out by CCTV for criticism.

Last December, Alibaba invested USD 1.25 billion in Ele.me, pushing its valuation to USD 4.5 billion.

DJI

The red-hot drone maker is also on the “blacklist”. Their smart hardware features an e-control function. Experts expressed concerns that once a security hole emerged on smart terminals or equipment, criminals could take advantage of the loophole to remotely control the equipment, threatening the physical and property security of consumers. The trendy unmanned aerial vehicle was also cast in a negative light.

DJI made an announcement on its Weibo account to respond to the concerns. As a smart hardware maker, DJI first thanked CCTV for educating all smart hardware owners in risk prevention. Then it clarified that it had, months ago, taken care of the potential security holes by upgrading the firmware.

Taobao

E-commerce is usually on the front lines of criticism for selling counterfeits, especially the large e-commerce platforms Taobao, Vipshop and JD.com. Besides selling fakes on platforms like Taobao, online shop owners also feed another phenomena called “Shua Dan”, meaning they create fake sales records. Taobao sellers can hire an army of shadow buyers to make fake orders from their shops on Taobao and leave high ratings and five-star reviews to lure more business.

On Monday, Alibaba, owner and operator of Taobao, made an official response within an hour of the report going out on CCTV. First, it “thanked” CCTV for exposing this long-standing problem of fake orders in the e-commerce industry and called for united efforts to resist it. Alibaba itself made a “complaint” that shadow buyers are gathering on SNS apps including QQ and WeChat to scheme this murky business, and that this is a link in the fake sales record chain that Alibaba is not able to reach and address.

Jack Ma, founder of Alibaba, said, before the 3.15 Gala, that they have planned an unlimited budget for their anti-counterfeit team to fight fakes. Well, combined with this precautionary move, we’d give Alibaba a thumbs-up for its “smart” statement. And it’s not the first time Ma has sworn to take down counterfeits.

In early 2015, China’s State Administration of Industry and Commerce harshly criticized Alibaba for permitting the sale of counterfeit goods and said the company failed to protect consumer rights. According to SAIC’s random inspection results for the second half of 2014, 62.75% of Taobao products were counterfeits.

To that, Ma declared that Alibaba was the victim. “Alibaba loses up to five users for each fake product sold on our trading platforms,” he said.

“Fake goods are like germs in the air. The right way to deal with this problem is to first accept it and then defeat it,” he added.


Originally published at www.allchinatech.com on March 16, 2016.