China's online market has been rigged with counterfeit and tawdry goods. According to a new report, only 58.7 percent of all items sold via e-commerce in the country last year was genuine - the other 40 percent were fake.

The report by the law enforcement and inspection team of the National People's Congress Standing Committee was presented to high-ranking lawmakers on Monday.

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The report revealed that as China experiences staggering e-commerce growth, the number of counterfeit items sold is also increasing. The country received 77,800 complaints about purchased counterfeit goods last year.

In the past five years, e-commerce has contributed as much as about 7 percent of China's gross domestic product (GDP). China has surpassed the United States as the largest online retailer in the world. Last year, Beijing earned about $442 billion online, while the U.S. earned nearly $300 billion.

Despite the growth and economic gains, China online market is plagued with fake products. The issue, which officials have sought to address, has been a long-suffering problem for international brands looking to veer into the Chinese market.

Alibaba Group Holding Ltd (BABA.N), China's most successful e-commerce company, has been heavily criticized for selling fake products. Earlier in the year, Jack Ma, Alibaba founder and Executive Chairman, said the company was itself a victim of counterfeit products.

Last month, the American Apparel and Footwear Association (AAFA) pressed the U.S. Trade Representative to include Alibaba in Washington's list of "notorious markets". Alibaba has been lobbying not be blacklisted. The Hangzhou-based company is working with renowned brands to get rid of counterfeit products from its online market.

Beijing's decision to publicize the report, which highlights a problem that has tainted the credibility of Chinese companies, has been widely welcomed.

The report advocates for the protection of the rights of consumers by urging officials to create an e-commerce legislation. It also calls for officials to improve e-commerce supervision and elucidate the government's position on the rights of consumers' and the responsibilities of sellers'.

TagsChina Ecommerce, China 2014 Online Product Sales 40 Percent Fake, China Online Sale of Fake Products