For Li, it remains to be seen if Alibaba will be as successful in the cloud as it has been in e-commerce. "I think people are happy that Chinese consumers are still spending in the e-commerce sector but they are waiting to see how (Alibaba's) other businesses, such as cloud computing, will play out. I think it's too early to say," Li said.
Another problem that weighs on Alibaba has been its problem with the counterfeit goods sold on its e-commerce platforms. In December last year, the U.S. Trade Representative office placed the company's C2C platform, Taobao, on a blacklist that reflected the names of companies that sold counterfeit goods.
This has not negatively affected consumer perceptions of shopping on Alibaba's e-commerce platforms, which saw gross merchandise volumes for its Singles' Day shopping event increase by higher than 32 percent on year to reach $17.8 billion. However, this dents the company's reputation among brand merchants and could potentially be a stumbling block for overseas expansion.
In its Jan. 25, 2017 report on Alibaba's earnings from the last quarter, Maybank Kim Eng Securities noted that counterfeit products were a downside risk for the company's shares as they could lose global brand share to e-commerce rival JD.com. In addition, the report also stated that "unexpected regulatory changes" over the issue of fake goods and intellectual property could impact the company negatively.
In addition, while Alibaba has taken action against fake goods that are being sold on its websites, some analysts say that this is too little too late. "The numbers speak for themselves. They've removed so many millions of listings (of counterfeit products) but the problem is still rampant," said Bharat Kapoor, COO at Strategic IP Information.
"Very little has been done on the ground," Kapoor said. To remedy the situation, he said that companies should be given more power when it comes to removing counterfeit products under their brand name on Alibaba marketplaces.
"The complaint filing process on Alibaba is so complex. There are some 30 sub codes that you have to use to file a complaint for each listing on Taobao and you have to justify that a particular product is fake. This is not something that is required for any other marketplace," Kapoor said.
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