Jack Ellis

German footwear maker Birkenstock has decided to quit the Amazon marketplace in protest at what it perceives to be a lax approach to counterfeiting on the part of the online retailer. 

From January 1 next year, Birkenstock’s US unit will stop supplying Amazon and will scrap authorisation of third-party vendors to sell its products via the site, according to a letter penned by Birkenstock USA CEO David Kahan and published by CNBC today. “The Amazon marketplace, which operates as an ‘open market’, creates an environment where we experience unacceptable business practices which we believe jeopardise our brand,” he said in the letter, which was sent to several of the company's retail partners on July 5. According to Kahan, these practices include regular sale postings made by known counterfeiters and a “constant stream of unidentifiable unauthorised sellers who show a blatant disregard” for Birkenstock’s pricing policies. “Policing this activity internally and in partnership with Amazon.com has proven impossible,” he adds.

On this last point, Kahan says that the company has presented “multiple proposals and ‘out-of-the-box’ ideas to Amazon management” in an effort to combat the counterfeiting and re-sale issues. However, he goes on to say that the e-commerce giant’s unsatisfactory response has been to suggest that Birkenstock sell its complete product offering to Amazon directly, thereby ditching the various retail partners – including many brick-and-mortar stores – to whom the letter is written.

Kahan acknowledges that Birkenstock’s chosen course of action will likely not lead to an immediate removal of counterfeits from the Amazon site – but it will at least guarantee to consumers that any products claiming to be Birkenstocks that appear for sale on the platform are not linked to the company. “By taking this course of action, we are, in effect, leaving the Amazon marketplace to counterfeiters, fake suppliers and unauthorised sellers with whom we have no relationships,” he says.

Amazon has yet to comment on the letter but the Seattle-based company is not the only e-tailer that has come in for hefty criticism of late for its handling (or perceived lack thereof) of the counterfeit problem. Last month, Alibaba chairman Jack Ma caused outrage among the trademark owner community when he seemed to suggest that fake goods were often “better than branded products”. These controversial comments followed Alibaba’s suspension from the International Anti-counterfeiting Coalition (IACC) in May, after a number of brand owners – including Gucci, Michael Kors and Tiffany & Co – quit the association in protest at the Chinese company’s membership.

That Birkenstock has chosen to walk out on Amazon altogether shows that concern over the tackling of fake goods on e-commerce sites is far from being a China-only problem. This was illustrated in this year’s World Trademark Review benchmarking survey – the findings of which were published in issue 61 of World Trademark Review. For the survey we asked trademark counsel to rate online retail platforms in terms of the level of policing challenge they present. Respondents ranked sites from five, meaning a significant challenge, to one, meaning no challenge:

Platform

Owner/operator

Country of origin

Challenge rating

Alibaba

Alibaba

China

2.87

eBay

eBay

United States

2.38

Taobao

Alibaba

China

2.34

Amazon

Amazon

United States

2.03

TMall

Alibaba

China

1.56

App Store

Apple

United States

1.44

Google Play

Google

United States

1.40

1668.com

Alibaba

China

1.39

Etsy

Etsy

United States

1.30


It remains to be seen whether other brands will follow Birkenstock’s lead and remove their presence on ecommerce sites where they perceive there to be counterfeit issues. Such a move can send put pressure on sites, by reducing revenue streams based on the sale of authentic goods, and allow the company to direct consumers to preferred sites for the purchase of legitimate goods. On the other hand, engagement with platforms is easier when ‘within the camp’ rather than outside, and the boycott of sites also results in reduced access to their customers. It creates a tricky conundrum for brands. 

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