The rumored counterfeits being produced in China could adversely affect the country's economy.

In an interview with Xinhua, Jack Ma, executive chairperson of Alibaba Group Holding Ltd, admitted that his company has been a victim of counterfeits, pointing out that one fake product sold could result to five lost customers, reported the China Daily.

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 "I don't believe success can built on dishonesty," Ma said, as he denied allegations that Alibaba has been taking advantage of counterfeits to boost its business.

The top business executive revealed that the company has spent millions of yuan yearly, as it joins the fight against counterfeits reportedly made in China.

In fact, he said that Alibaba's customers will be refunded and duly compensated if they will fall victim to counterfeits.

Ma noted that the company has recorded a complaint rate of .0116 percent, which is a lot lower than those made against local brick-and-mortar shops.

Although admitting that counterfeits have had a minimum impact on Alibaba's operations,  he explained that they would  eventually have a negative effect on China's manufacturing sector.

"It leaves visible wounds on Alibaba, but it could severely affect the economic transition," the businessman said.

Ma related Alibaba's relations to the country's economy as that of conjoined twins, saying that there would be no Alibaba without a large number of small businesses and sellers.

He pointed out that "Made in China" products would reportedly have no future if the people behind them are focused only on making quick money.

However, he quickly added that the local manufacturing industry will face brighter prospects if it is anchored on sustainability and competitiveness.

Ma said that the problem of rumored counterfeits in China is a national concern and therefore, cannot be addressed by Alibaba alone.

Improved national laws, he said, would help the nation's businesses build competitive brands.

Ma disclosed that Alibaba is currently monitoring the sale of alleged counterfeit items from China and has kept the market watchdog informed, while offering funds to original equipment manufacturers (OEMS) that would enable them to help them build their own brands

Tagschina, counterfeits, Alibaba, Jack Ma