Kering Dismisses Lawsuit Against Alibaba as Part of New Partnership -- Update
04 August 2017 - 2:35AM
Dow Jones News
By Matthew Dalton in Paris and Liza Lin in Shanghai
PARIS -- Luxury conglomerate Kering Co. has agreed to dismiss a
lawsuit against Chinese e-commerce giant Alibaba Group Holding Ltd.
as part of a new deal between the two companies to fight
counterfeit goods sold on Alibaba's websites.
The lawsuit, filed by Kering in U.S. District Court in New York
in 2015, accuses Alibaba of conspiring with Chinese merchants to
sell knockoffs of Kering's brands, which include Gucci, Saint
Laurent and Bottega Veneta.
Thursday's announcement is part of a continuing rapprochement
between the luxury industry and China's e-commerce companies. The
industry is cautiously agreeing to sell some brands through these
online platforms, pushing aside past concerns about China's unruly
counterfeiting industry using these websites to peddle high-end
fakes.
Saint Laurent this week said it would sell over the internet in
China for the first time through a partnership involving JD.com,
China's second-largest online retailer.
LVMH Moët Hennessy Louis Vuitton SE, the world's largest luxury
conglomerate, earlier this year agreed to open an online shop for
its watch brand TAG Heuer on one of Alibaba's websites. LVMH chose
JD.com to host its online store for cosmetics retailer Sephora.
Under the agreement announced Thursday, Kering and Alibaba will
set up a "joint task force" to exchange information and work with
law enforcement to pursue counterfeiters of Kering's brands. The
companies said they would identify merchants selling counterfeit
goods using Alibaba's "advanced technology capabilities."
"The new partnership represents a milestone in both parties'
investment and efforts to protect brands' intellectual property
rights," the two companies said in a statement.
The luxury industry has been eager to sell online in China to
capture growth in one of the world's biggest markets for high-end
goods. But concerns and clashes over counterfeits have slowed
cooperation between the industry and China's internet
retailers.
Alibaba, which runs two of China's most popular online retail
sites, Taobao and Tmall, has been making a big push to form
alliances with Western brands and work with law enforcement to
clean up fakes on its platforms in recent months. Since its Taobao
site, which connects individuals and small- and medium-size
merchants with buyers, was reinstated on a U.S. government list of
"notorious" marketplaces for fakes in December, Alibaba established
an advisory board of brands including Louis Vuitton and Samsung to
help it improve intellectual-property protection.
The U.S. Trade Representative's office said it put Taobao back
on the list last year due in part to "the challenges right holders
experience in removing and preventing illicit sales and offers of
such goods." The list, which includes file-sharing platform The
Pirate Bay and physical marketplaces such as Beijing's Silk Market,
names and shames those that are seen as not doing enough to fight
counterfeiting and piracy.
The deal with Kering should help Alibaba attract more luxury
brands to sell on its platform. As incomes rise in China, more
Chinese consumers are demanding high-end products, and going online
to buy them. JD.com, Alibaba's biggest rival, bought a stake in
luxury brand retailer Farfetch.com Ltd., which hosts 200 luxury
brands on its platform, for $397 million in June. Alibaba, whose
marketplace apps attract more than 500 million monthly active
users, said Tuesday it would be creating a luxury pavilion on its
business-to-consumer Tmall consumer for select brands including
Burberry and Hugo Boss.
Write to Matthew Dalton at Matthew.Dalton@wsj.com and Liza Lin
at Liza.Lin@wsj.com
(END) Dow Jones Newswires
August 03, 2017 12:20 ET (16:20 GMT)
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