Alibaba Turns QR Codes Visual To Fight Fake Goods

When Alibaba invested in Israeli QR code developer Visualead in January, it was obvious that Alibaba was going to integrate some sort of QR codes into its products — but it wasn’t quite clear how.

Now, however, that vision has become a bit clearer as Alibaba and Visualead have teamed up on new QR-like code style tags that will be applied to its products, Wired reportedVisualead is a young startup that specializes in offline to online marketing between customers and brick-and-mortar establishments. Its main product has been developing QR codes that disguise themselves into products for better integration, as well as using colors and animations to make them more interesting.

Now Visualead will help Alibaba launch the next generation of QR codes into the retail marketplace as the new codes, or tags, will feature one-of-a-kind images that will create dotless codes that work via a scanner to ensure the goods being sold from Alibaba’s marketplaces are authentic. This new scanning system could be used for anything from product packaging to mobile payments — and even coupons or mobile tickets, Visualead CEO Nevo Alva told Wired.

He explained that because the codes require a secure scanner to confirm the product’s authenticity, there’s less of a chance counterfeit goods could sneak through the marketplaces. This technology involves “computer vision techniques,” that are unique to each product so it cannot be used more than one time, Alva said.

When Alibaba invested what was said to be no less than $10 million into Visualead, the deal was for the company to work on the next wave of QR technology. Alibaba will use the patents and technology from the startup across its business holdings, especially eCommerce.

While the new codes mirror traditional black and white QR codes, the more visual style allows for actual images to be put in the middle of the code — which could also help merchants provide better branding on the products so customers know they are getting authentic goods.

For Alibaba, proving its goods are authentic has become a particularly hot-button issue as the eCommerce company was just accused of allowing for the sale of counterfeit goods. These accusations have resulted in a lawsuit from luxury brands, led by Paris-based Kering, which includes Gucci and Yves Saint Laurent as two of its brands.

The lawsuit alleges that Alibaba had enabled fake goods to be sold on its marketplaces on an international scale. It also accuses Alibaba of not only allowing for this activity to happen, but also playing a part in the manufacturing and sale of the fake goods that featured the luxury brands’ logos without the company’s knowledge. Alibaba is being sued for trademark and racketeering violations.

Alibaba has denied claims that it knowingly allows for this practice to occur, and has gone so far as to tell global brands that it wants help from them in spotting fakes that may be being sold across its marketplaces. Alibaba has said in the past that it has spent more than $160 million (1 billion yuan) combating counterfeit goods and improving customer protection since the start of 2013.

Ni Liang, Alibaba’s head of internet security, spoke with Reuters about the company’s plan to fight the potential spread of fake goods across its site. Liang indicated that brands should help Alibaba in the fight against fake goods, instead of fighting it with lawsuits.

“I strongly believe that spending money on lawsuits could result in a completely different outcome than cooperating with us,” Liang said in the interview, later noting that the amount of fake goods increased to 130 million, which was 50 million higher than two years prior.

“If a brand doesn’t cooperate with us we’ll still fight fakes for them… But when we cooperate we can fight better,” Liang said.




The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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