Alibaba: Victims of "Brushing"

The Chinese government has accused Alibaba of failing to regulate fake transactions and bribery, among other illegal activity. It’s easy to see why these fake transactions are occurring. With over 6 million vendors, it seems impossible for one’s products to be seen on Taobao, Alibaba’s consumer-to-consumer portal and biggest online shopping site. As a vendor, the more customers you have, the more status you gain, and the more featured you will be on Taobao. Vendors have thus turned to an illegal service called “brushing.” It’s the same idea as Twitter and Instagram users who buy followers: brushing allows vendors to buy customers.

Brushers in China range from housewives to students who place fake orders to help vendors increase sales. Individuals only need three things to become a brusher: a computer, a Taobao account, and an online payment account. These agents can even take courses on how to evade detection by Alibaba. For a small fee of 50 to 99 yuan, brushers can gain access to online tutorials and tests, learning strategies on how to mimic normal customer behavior.

Merchants claim that without faking transactions and customers, their products will end up in the back of the search results, and customers will never notice their products. Vendors pay brushers the cost of the product ordered and an additional service fee. Using that money, brushers place the order on Taobao for real transaction records. The vendor then ships an empty box in return for positive reviews.

Alibaba claims it has “sophisticated tools” to detect and punish sellers that log fake orders, but as it turns out, this issue of false advertising is more pervasive than it can handle. In November 2013 Alibaba’s Vice President, Yu Weimin, reported that 17% of all merchants faked 500 million transactions, worth over 10 billion yuan.

The problem for Alibaba is that, under Chinese law, Alibaba can be held accountable if it knows about the fake transactions and does not take action against it. In early January, China’s State Administration for Industry and Commerce published a report claiming that Alibaba has failed to crack down on illegal activity. (This report was later taken down.)

However, all stakeholders fall victim to brushing. Vendors must continually pay for brushing services because their competitors are doing so. It is no doubt that brushing does help feature a vendor’s products, yet it now yields little true benefit and causes an unsustainable cycle. Taobao consumers can no longer trust user reviews and featured merchants. Now, just because your product is on the first few pages of the search results does not mean your product is superior or even reliable. Lastly, brushing has created a credibility crisis for Alibaba’s brand image. It will be interesting to see Alibaba’s next steps toward resolving the issue.

-- Amanda Lin