Alibaba Tougher on Fakes Than Amazon, Says Swatch CEO

Alibaba is fighting watch counterfeiting far more aggressively than online U.S. rival Amazon, charges Swatch CEO Nick Hayek. In a blistering and extensive interview with CNBC, Hayek applauded Alibaba for "fighting actively against fakes," went on to slam the nation of France as inhospitable to Chinese luxury tourists, and lauded the Chinese government for creating a 1.3 billion consumer class that is actively buying. "If I look at what Alibaba is doing," Hayek said in the April 24 interview with CNBC's Geoff Cutmore, "they are trying to make a service to the consumer and to earn money" by battling watch counterfeiting. "This, Amazon is not doing." Hayek blamed Amazon's "10,000 lawyers" for discouraging the company from involving itself in policing fakes. (Although the Seattle-based firm has filed lawsuits against so-called "bad actors.") In Hayek's opinion, Alibaba is more vigilant about fraudulent sellers. "The Chinese are doing it. They fight against it." Alibaba has been criticized elsewhere though, with its e-commerce platform Taobao described as a "notorious market" by the U.S. Office of the Trade Representative. There's No Spectacular Return of the Chinese Luxury Consumer The Swatch CEO, moreover, disputed that there has been a reported "spectacular return of the Chinese consumer" to the luxury sector. "It's not a return. He was always there. He just bought in different places.” In some cases, that meant the middle-market sector where Swatch is positioned. In terms of encouraging spending, “the politics over there, [in China] have done the right things." Hayek did agree that Chinese luxury spending in France, however, has declined. "The [Chinese consumer], he wasn't very motivated to go to France, too many French people there," he said. "You have to have some special way to treat foreigners when they come into the country. Ever taken a taxi in Paris? So you know what I'm talking about." The nation's terrorist attacks also chilled demand, Hayek noted. U.S. Department Stores Are Lagging Behind Hayek also faulted the U.S. department store shopping experience. American shopping malls are “broken... but there are countries in Asia where you have department store shopping malls that are well managed. They give an emotional experience.” In the year ahead, the CEO of Swatch, which has been better-known for its less expensive fashion watches, said his company will be rich in product in all price categories. "We are present in all segments, in the lower, middle, high end, prestige, whatever you want." (Right now, the most expensive Swatches available in the U.S. online store circle around 250, but selected Swatch retailers and antiques dealers sell pricier vintage models, such as the bright yellow 1985-86 Keith Haring for about 1,750.) In it's 2017 annual report, Swatch posted a 5.4 percent net sales gain compared with the previous year, with sales growth up 12.2 percent in the second half of the year and 14.9 percent in the fourth quarter.

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Alibaba Tougher on Fakes Than Amazon, Says Swatch CEO