Recruiting in China

China's largest shopping website, Taobao.com, gave an official response to a controversial quality inspection report by the country's commerce regulator on Wednesday.

The online store will file a complaint to the State Administration for Industry and Commerce (SAIC) based on accusations of a senior official's improper supervision, according to an announcement on Taobao's Sina Weibo account.

"Director Liu Hongliang followed improper procedures and his legal assessment was emotional," Taobao said, "He reached a conclusion that was not objective, bringing a negative effect on Taobao and e-commerce businesses."

"We welcome any supervision that is fair but oppose nonfeasance and random or malicious official actions," the post said.

The move is the latest salvo between Taobao, the most profitable branch of e-commerce giant Alibaba Group, and the SAIC since the latter published a quality inspection report on Jan. 23 that gave Taobao the lowest rank in terms of certified product rate.

FAIR OR NOT?

At the core of the quarrel is the question of whether or not Taobao was fairly treated.

The SAIC's sample test showed that only 37.25 percent of surveyed commodities sold on the website were authentic, lower than a 58.7-percent average of major online shopping platforms. Taobao's major rival, JD.com saw its rating at 90 percent.

Taobao fired back on Tuesday and said it was unfairly treated.

It claimed the inspection was flawed in logic and contradicted previous data, pointing out the authority only made a sample of 51 items which cannot represent the enormous trade volume on the platform.

The SAIC's survey had a 20-item sample for JD.com, a 10-item sample for Yhd.com and only a 1-item sample for Zol.com.

Tuesday's post was deleted shortly after but still stirred heated public debates with majority opinions in favor of the company.

Shi Yuzhu, a celebrity and board chairman of Giant Interactive Group, said the sample was too small compared to the website's 1 billion commodity categories (as Taobao claimed). "The sample was a little pale if statistically speaking," He said.

Responding to the claims, an SAIC official Yang Hongfeng said the survey just aimed to evaluate market risks and warn against illegal activities and no e-commerce firms were targeted.

Yang said the survey was conducted by a third party to look for problems instead of showing how poor the product quality was in online shopping, and the results should not be over-interpreted.

On Tuesday, another SAIC official, Yu Fachang said strengthening supervising efforts in online market is their legal duty and related officials have conducted activities in line with the law.

FAKE OR NOT?

An anonymous government official in east China's Zhejiang Province, where Alibaba's headquarter is located, said Taobao, while refuting the survey, avoided the question that if there were fakes on its platform and the responsibility it should take.

Yang said Alibaba has not paid enough attention to illegal operations on its platform and with no effective measures to tackle the problems, which triggered a honesty crisis for the group and brought a negative effect to the sector.

On Wednesday, the SAIC published a white paper regarding Alibaba, which listed five problems in the company's shopping platform including loose access requirement, slack inspection of commodity information, chaotic management of sales and a defective credit rating system.

Taobao.com, having grown to the most popular online shopping platform in China, allowed influx of fake commodities and illegal transactions, the white paper said.

The white paper was compiled based on a closed-door symposium of the SAIC and Alibaba in July, 2014. The meeting was chaired by Liu and no information was released at that time to avoid a negative impact on the group's IPO.

Taobao's announcement did not deny there were counterfeits traded via its platform but said the website was also a victim and would not shirk the responsibility of removing fake goods.

Alibaba's chairman, Ma Yun described fakes as long-existing viruses that have always plagued economic development.

AT LEAST ONE THING AGREED

Although the SAIC and Alibaba still remain locked in debate over the certified product rate, both sides agree on tough action against counterfeits.

Ma promised the group would mobilize all the resources to help address the problem and called for combined efforts from society instead of unbacked accusations.

Taobao announced on Wednesday that it would initiate a "special operation battalion" comprised of 300 specialists to cooperate with officials to crack down on fake goods.

Yu said the administration will continue to act hard against illegal activities to safeguard online market order and consumer interests.

Jin Zhanming, economics professor of Tsinghua University, said a sound interplay should form between producers, online platforms and regulators with all sides having responsibilities to safeguard market order.