Mr. Jack Ma, PleaseMind Your Own Taobao:

An Open Letter from Chic Hangzhou, a Victim of Taobao

Mr. Jack Ma:

Pleased to Meet You!

Today coincides with International Day for Protecting Consumers’ Rights, a day to deepen self-reflections amongst all manufacturers. If the manufacturers continue to provide the market with counterfeit and shoddy products, “consumers as masters of new consumption” as the theme to echo the protection of consumers' rights in the year of 2016, will become an idle talk. As a matter of fact, your Taobao, also including Tmall and Alibaba, has been the symbol to sell counterfeit and shoddy goods, which made the benefits of many consumers infringed and had the market reputation of the relevant enterprises libeled. Today, based on the irrefutable fact that the benefit of Hangzhou Chic Intelligent Technology Co., Ltd, was violated by Taobao, Tmall, and Alibaba, we will let out a cry: Mr. Jack Ma, Please Watch Your Taobao.

Hangzhou Chic Intelligent Technology Co., Ltd was founded in May 2013, mainly producing Chic intelligent scooter (generally known as balance swing car; and officially known as human-computer interaction intelligent scooter). Currently, the company has possessed nearly 150 core intellectual property rights in this field and about 70 authorized patents, covering many countries, such as China, America, European Union, and Canada etc. Competing with other companies like Joyoung and Supor etc. in the Innovation Design Competition of last year’s “Mayor’s Cup”, Chic won the honor of the gold medal. It has become the only enterprise that possesses complete intellectual property and sustainable research and development ability at home and even abroad. Due to its original cutting-edge technology and unique design, Chic has successfully expanded the market in many countries or regions such as Europe, America, Japan, South Korea, Middle East, Africa and South America etc. Chic has aroused the fashion of riding internationally and become a big industry at home with strong development momentum. According to some statistics, the production and processing output value of Chic’s knockoff branches in Hangzhou, Jinhua Yongkang, Shanghai, Soochow, and Shenzhen and so on, has exceeded 10 billion RMB in 2015. We can say that Chic intelligent scooter is “the second motor car industry”, a technologically innovative product “intelligently made in China” that helps to make Chinese feel proud and elated on the internationally stage.

However, as “the electric balance swing car” is popular with the market, many companies copied Chic’s patented products both at home and abroad. Chic Intelligent researched and developed the first car in August 2014, and soon after it was put on the market, numerous balance car sellers sprung up on the platform of Taobao, Tmall and Alibaba at home, which seriously invaded our own intellectual property right and enterprise reputation. Therefore, our company began to safeguard our rights. At the very beginning, we complained through the platform of Taobao and Tmall, but it was not as efficient as the platform promised—the platform claims to make a difference within a short time if you complain online. We complained hundreds of infringement sellers in total to the platform of Taobao and Tmall, while only about 30% of those were prohibited to sell, which compelled us to safeguard our rights with the aid of judicial means. We have signed cooperative agreement with 16 law offers successively so far, and have found and sued dozens of infringement sellers on the platform of Tmall and Taobao within only one year. However, the judicial means matters surprisingly little. Instead, more infringement sellers appear on those platforms. In this case, we have no choice but to send this open letter to you.

Mr. Jack Ma, you often say: “Born in China, Alibaba is now a globalized company.” We deeply appreciate your vision and pursuit. However, since Alibaba was born in China, its image is somehow correlated with that of China, Chinese product, the icon ‘Made in China’ as well. Indeed, “the fake goods are the pain of Ali, but also the pain of the Chinese economy”, which greatly obstacled and tortured Chic of Hangzhou. Currently, with regard to the field of electric balance scooters, the European Union, the United States and other countries would unanimously cancel the market access of electric balance swing cars imported from China, or even define them as ‘hazardous goods’. As far as I know, all swing cars imported from Chinese manufactures have been retained off shore and prohibited from entering the destination harbor; Amazon US had pulled all ‘swing cars’ to be sold on its online platform off shelves, and recommended customers to ask for return since Dec.12, 2015. There are currently nearly 10 million units of inventory which can’t enter market normally, valuing 400 million dollars; all accounts have been frozen for three months, the capital of which amounts to more than 200 million dollars, loss of manufacture reached 500 million RMB in terms of raw material. Due to its banning in overseas market, sufferers from raw material suppliers, parts assembling factories to terminal servers, will suffer substantial claim and laid off, more than 300 thousand people will be affected.

Of course, we know that Alibaba is also one of the victims brought by fake goods. To cope with this scourge, in recent years, you set up a special team, invested heavily, strengthening the intensity of the fight against fake and shoddy products. However, the effect is not ideal. We noticed that you frankly admitted in an exclusive interview, “the damage of fake goods brought to us is limited, but its damage to Chinese manufactures is fundamental, since I think we have not found an effective way to deal with fakes off line.” You also proposed that, to batter the root of fake goods, we need to batter the ‘doing of producing fakes’. “What we are now vigorously doing is creating an environment and fostering a mechanism, under which the selling of genuine ones is more profitable than fake ones!”

It is very desirable to say that the selling of genuine ones is more profitable than fake ones. It should have been done much earlier under China’s commercial circumstance. However, this target can hardly be hit by combating fake goods alone. Better ‘prevent’ than ‘combat’ the action of making fake goods, to make the selling of genuine ones more profitable, the pre-condition should lie in preventing the production of fake goods. Never late till the opening of Pandora’s box, we should eternally cage the evil within it! In a bid to fulfill that, Alibaba should strictly inspect the admission of manufactures, those without independent intellectual property rights should be prohibited from logging onto Taobao, Tmall or Alibaba. With respect to the innovative product—electric balance scooters, Chic Hangzhou is longing for cooperation with Alibaba, in a bid to explore the effective means of exterminating fake goods.

Over half a century ago, John F. Kennedy, the 35th President of the US, made a special union address to protect the legitimate interests of consumers on March 15, which was regarded as the beginning of International Day for Protecting Consumers’ Rights. The history of human’s consumption from that time attested that as for the company, strict disciplines, honest management, and refusal to make and sell counterfeit and shoddy products, can be the only way to fulfill the protection of the consumers, and achieve the dream of consumers to be “the masters of new consumption” completely.

Premier Li Keqiang required in the report on the work of the government, “we should strengthen the degree of intellectual property’s protection and the right to use, crack down all the behaviors both to infringe upon intellectual property and to make and sell counterfeit goods.” Therefore, Mr. Jack Ma, Let’s respond to the call of the Party Central Committee, strive together, try to create a fine commercial environment, make a contribution to the consumer benefits around the world and the remodeling of the reputation of Chinese-made goods.

Hangzhou Chic Intelligent Technology Co., Ltd

Mar. 15th, 2016.