One of the jewelry-store industry’s leading publications is advising its readers not to buy gems on Alibaba.com, terming the site, the most lucrative initial public offering in history, “a terrible place to buy a diamond.”
Alibaba, China’s leading e-commerce company, went public last week at $25 billion, and is on-track to become the largest retailer in the world. its worldwide sales across several sites already exceed eBay’s and Amazon’s combined.
In JCK magazine (aka Jewelers’ Circular Keystone) news editor Rob Bates, notes that when he typed in “diamond” on Alibaba’s search engine, “on the first page of the listings for diamond, about half of them didn’t seem to be diamonds at all.” Four of the initial search results were instead either cubic zirconia, a mis-labeled synthetic diamond or moissinite. And that was on the first page alone.
Altogether, a diamond search on Alibaba gets 2.3 million hits, although many of those relate to “diamond-cut” gems or “diamond saw blades.”
In the article “If You Think eBay Is Bad for Diamonds, Check Out Alibaba,” JCK notes that Alibaba does consider itself to be a third-party listings service and discloses these counterfeit issues and risks in its prospectus. “When we receive complaints or allegations regarding infringement or counterfeit goods, we follow certain procedures to verify the nature of the complaint and the relevant facts,” the company’s prospectus said.
But the company also warns potential investors: “We have been and may continue to be subject to allegations of civil or criminal liability based on allegedly unlawful activities carried out by third parties through our online marketplaces…We could face claims relating to such listings or sales or for our alleged failure to act in a timely or effective manner.”