Alibaba spent $161M fighting fakes, bans 90M items

Alibaba Group signage at the New York Stock Exchange during IPO, September 19, 2014.
Adam Jeffery | CNBC

Chinese ecommerce giant Alibaba took 90 million counterfeit items offline and spent over 1 billion yuan ($160.7 million) fighting fake goods, from the beginning of 2013 to November this year.

The online company's announcement highlights its massive issue with so-called "knock-offs" and its efforts to clean up its act ahead of the company's record $25 billion initial public offering (IPO) in September.

"From Alibaba Group's perspective, we bear a serious responsibility in this fight against counterfeits," chief executive Jonathan Lu said in a statement, according to Reuters.

Faking it on Alibaba

Alibaba has been focus of US regulator scrutiny for some time. Its ecommerce platform was on the Office of the U.S. Trade Representative's list of "notorious" markets for intellectual property until 2013.

But fake goods in China still remain a major problem. On Singles' Day – China's equivalent of Cyber Monday in the U.S. where retailers promote huge discounts – the State Administration of Industry and Commerce (SAIC) investigated counterfeit products. It found that 10.6 percent of products sold online were below standard or fake. On Singles' Day, Alibaba reported $9 billion of sales.

'Fighting losing battle'

But analysts said that this is not an issue specific to Alibaba but spreads across many ecommerce platforms.

"It is a problem that is industry-wide. Any of the auction sites where you have a lot of different sellers from all around the world will have an issue with counterfeits," Neil Saunders, managing director of retail analysts Conlumino, told CNBC by phone.

"A lot of companies like Alibaba and eBay have ways to take counterfeit items off and intervene but the volumes are so great that they are fighting a losing battle."

Other companies have made strides to tackle online fake goods. eBay and luxury house LVMH, recently on the U.S. auction site.