The Chinese internet
company’s much anticipated IPO last Friday has met
the initial expectations of investors. Closing the day at
nearly 40% above the opening price, the IPO will soon go down
as the largest ever after it
sold an additional 48 million shares this weekend.
While much of the frenzy has focused on the size of
China’s growing middle class and its tremendous
spending potential, the splashy IPO is also a stepping out of
sorts for the Alibaba brand. The Alibaba name has been
plastered all over the news in the months leading up to the
IPO, and even if the average American or European did not know
what Alibaba was (and it’s safe to say that
Alibaba is already a household name in its home market),
there’s a good chance many know it now. For many
Americans and Europeans, Alibaba may be one of the few, if not
the only, Chinese company that they can name. Even if most only
think of it as "that Chinese company with the biggest IPO of
all time", that is still a big step forward, given the relative
difficulty that Chinese companies have had in establishing
strong brand identities outside of China (with a few limited
exceptions such as Lenovo, Huawei and ZTE).
Even Alibaba’s detractors prove this point to a
certain degree; the fact that there’s
even an argument that the IPO is overhyped is an
acknowledgement that there is cachet and value associated with
the Alibaba name and its reputation as the
eBay/Amazon/everything of China.
This is not a completely new development. Though Alibaba has
had a relatively small presence in the US and Europe (
though this may change soon), it has had success building
its brand in other markets to the point where others are trying
to use its goodwill. In fact Karen Law, senior counsel for
Alibaba, told Managing IP that the company regularly deals with
infringers in places such as India, Russia and the Middle
East making Alibaba-branded goods or using the name for
their own services.
Though Alibaba is on its way to being the first global
Chinese brand, its Taobao market was listed as a USTR notorious
market until December 2012. Since then, Alibaba has made an
effort to shake off a
reputation that it did not respect IP rights. In the past
year, it has signed deals with luxury brands
Louis Vuitton Moet Hennessy and Keiring (owner of Gucci) to
coordinate efforts to stop sales of counterfeits. And earlier
this month, during UK IP
Minister Baroness Lucy Neville-Rolfe’s visit to
China, the company signed a memorandum of understanding
with the China-Britain Business Council, agreeing to do more
to crack down on infringers.
In a sense, Alibaba’s, and similarly
China’s, development follows a tried-and-true
pattern. Much like how the US had a reputation for
having little respect for copyright until the development
of its own publishing industry in the late 19th
century, the expectation has been that China’s
attitudes toward IP protection will change when it, to borrow
Neville-Rolfe’s phrase, has "skin in the game".
And China indeed wants to play - its National IP Strategy has
ambitious goals for all forms of IP, including the
development of world-renowned brands. It has also taken
notable steps in
strengthening IP protection. The continual improvement of
IP protection on Alibaba’s marketplaces and in
China overall is a reflection that their interests are aligning
with those of international rights owners.