Alibaba Sues Shatui.com

22 Dec

Alibaba is suing the Chinese website Shatui.com, which allegedly links merchants with people willing to falsify purchases and write positive comments that can drive sellers up in Alibaba’s rankings. That process is called “brushing.” The suit in Hangzhou is seeking 2.16 million yuan ($310,000).  Shatui.com’s site is no longer online, instead redirecting to an e-commerce website.

According to Bloomberg, brushing works as follows: a website like Alibaba’s Taobao is tricked into thinking a purchase has been made; the movement of money in the transaction is disguised. The fake buyer communicates with merchants through instant messaging apps such as QQ.

Alibaba has a complicated history with so-called brushing operators, who have pumped up gross merchandise volume for years but now undermine its push for credibility. As Alibaba expands internationally, it is trying to shake off a reputation for being a conduit for shady transactions.

“Alibaba wasn’t as stringent about brushing before its IPO, but it’s really cracked down on the malpractice in the past year,” said Ray Zhao, a Shenzhen-based analyst at Guotai Junan Securities Co, in an interview with Bloomberg.  “It’s quite essential for the company to maintain its credibility and keep the system healthy as they want to attract larger and high quality brands.”