Gucci Joins Tmall e-tailer, Kering drops lawsuit against Alibaba for Counterfeiting

Gucci Joins Tmall e-tailer, Kering drops lawsuit against Alibaba for Counterfeiting

On December 21, 2020, Gucci launched its first of two flagship stores with Alibaba's Tmall Luxury Pavilion. This flagship store offers products in Gucci's fashion lines, while the second store, set to open this month, will feature beauty items.

Alibaba's Tmall Luxury Pavilion is an invite-only e-commerce platform for luxury brands. Though consumers have comfortably shifted to online shopping, many luxury brands have been hesitant to venture into e-commerce, concerned about selling their products alongside brands whose image and quality of goods are not of the same caliber. Though Alibaba's Tmall Luxury Pavilion claims to offer a distinctive environment where “luxury brands can deliver the same kind of exclusivity and custom-tailored shopping experience online as they offer in their brick-and-mortar stores,” Gucci waited three years since Tmall launched in 2017 to finally join the platform.

Kering, the French Luxury group that owns the Gucci brand, has also announced plans to drop its lawsuit against Alibaba. In the lawsuit, which has been ongoing for five years, Kering sued Alibaba for alleged counterfeiting. In an agreement between Kering and Alibaba in 2017, the two companies agreed to establish a task force to protect Kering’s brands (which also includes Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen), and utilize Alibaba technology to help regulate and remove counterfeited products from the platform. A statement from Kering’s website notes that the companies have “come to a groundbreaking agreement to cooperate in their efforts to protect intellectual property and take joint enforcement actions online and offline against infringers in order to provide the best consumer experience and a trusted environment.”

Alibaba has faced various allegations in the past that its online shopping sites do not proactively prevent the sale of copyright-infringing products, which has been a significant concern for luxury and everyday brands across various e-commerce platforms. In October 2020, eBay announced its plans to verify collectible sneakers priced over $100 in order to address counterfeiting issues. The seller will now be required to send the sneaker to an independent third-party authentication facility for a comprehensive inspection before shipping. After verification, eBay will use expedited shipping to send the sneakers to the buyer. Forbes provides the following statement from Jordan Sweetnam, the SVP and General Manager of eBay in North America: “eBay operates the world's most diverse sneaker marketplace—with the widest selection and best prices—and by removing any uncertainty with the buying process, our community can buy and sell with total confidence.”

The Consumers Council of Canada released a report in June 2019, highlighting the concerns faced by brand owners and consumers alike with respect to the counterfeiting and pirating of consumer goods and services. Strikingly, the report notes that law enforcement agencies have reported an increasing concern that distributors of counterfeit goods are associated with organized crime and terrorist groups.     

A statement from the Business of Fashion notes that "in 2018, Gucci chief executive Marco Bizzari said during BoF’s China Summit that he was reluctant to partner with China’s e-commerce platforms due to concerns regarding counterfeits." Though counterfeit products continue to remain a pressing concern for branded goods, innovation, and consumer health and safety, with the COVID-19 outbreak pushing retailers to move online, it is unsurprising that Kering's Gucci brand has moved in the direction of partnering with Tmall.

Alessia Monastero is an Intellectual Property and Branding Lawyer and IPilogue Senior Editor.