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Fraud Forces Top Execs Out At Alibaba.com

Alibaba.com, the fast-growing Chinese e-commerce site that links global buyers with Asian manufacturers, announced yesterday that its CEO and COO had resigned after an internal investigation uncovered fraud at the company. David Wei, the company’s longtime CEO, and Elvis Lee, the COO, were not directly involved in the fraud, but left the company after accepting responsibility for not stopping it.

According to Alibaba.com, the company found that some of its “Gold Suppliers” were in fact phony companies. Alibaba.com’s internal investigation revealed that 100 salespeople for the company conducted the fraud by allowing completely fake entities to register and sell products on the Alibaba site. Even further, these bogus companies were listed by the salespeople as “Gold Suppliers,” indicating that they were among the site’s most trustworthy. Alibaba’s investigation also showed that these companies lured customers into paying for electronics, but after the payments arrived, the goods were never delivered. In its public statement, Jack Ma, chairman of the company and a member of Counselor’s Power 50, said about 2,300 companies that registered as Gold Suppliers over the past two years had committed fraud on the site.

“Our company has determined that the vast majority of these storefronts were set up to intentionally defraud global buyers,” said Ma, in a prepared statement. “The methods of the perpetrators suggest that they have engineered an organized and systemic attack on the integrity of the Alibaba.com platform for illegal gains.”

Alibaba said only about 100 salespeople out of a sales force totaling 5,000 were involved in the fraud. Many of the workers were fired, and the company is continuing its investigation. “We must send a strong message that it is unacceptable to compromise our culture and values,” said Ma.

(This article has been reposted from the Advertising Specialty Institute Newsletter)

Arnold Was Not So Short Sighted

California Promo Ban Concerns Distributors

In a decision meant to help cut the state’s budget deficit, California Governor Jerry Brown has instructed all state agencies to stop purchasing promotional items. Brown, who referred to ad specialties as “doodads and plastic gewgaws” during a press conference, says California has spent $7.5 million on promotional products since 2007. “We don’t need that stuff,” Brown said. “Not a cent of taxpayer money should be spent on flashlights, ashtrays or other unnecessary items, most of which likely end up in landfills.”
In response, distributors believe Brown is not only misguided but also misinformed. “He’s obviously not talked to any marketing gurus that would tell him the amount of money ad specialties save companies,” said Sam Knox, vice president of San Diego-based Clever Advantage Inc. (asi/163117). “It’s unbelievable he would say what he did. He used promotional products in his campaign. I sure have seen a lot of Jerry Brown bumper stickers around.”
Indeed, some in California are calling Brown’s new initiative against promotional products just a symbolic gesture that doesn’t get to the core of the state’s budget problems. California Republican Party Chairman Ron Nehring said that Brown’s ban on ad specialties is nothing more than a diversion. “Let’s get real,” he said. “Jerry Brown’s war on swag is a distraction from his reluctance to confront the cows sacred to the state’s government employee unions.”
Industry distributors are concerned that the new ban on promotional products by government offices in California will spread to other states, as the focus on budget-cutting intensifies. In a poll on www.asicentral.com since the news from California broke, 59% of industry professionals said they believe that other states will follow California’s lead by telling their state agencies to stop purchasing ad specialty items. “If we do nothing, the bans will spread,” says David Woods, president of Counselor Top 40 distributor AIA Corporation (asi/109480). “It is in our hands. It requires constant attention and lobbying by all of us on the local level to sell the value of promotional products.”
Brown, who took office for his third non-consecutive term as California’s governor in January, is proposing $12.5 billion in cuts to state spending, along with substantial tax increases. Brown also recently ordered a hiring freeze and cut back on state cell phones and vehicles as part of his effort to reduce a $25 billion budget deficit.
To let Governor Jerry Brown hear your feelings on the issue, go to http://gov.ca.gov/m_contact.php or call (916) 445-2841. You can also send concerns about his latest decision to his Facebook page at www.facebook.com/jerrybrown.

(This article has been reposted from the Advertising Specialty Institute Newsletter)

Irony?

My son asked me last night who makes up words. Good question. Who does come up with things like Hippopotomonstrosesquipedaliophobia which naturally enough is the word to describe a person who has a fear of long words. Anybody???

Cheers

Iain

There is more to Orlando, Florida than Disney World, who knew?

Leah and I found ourselves fortunate to attend the ASI show in Orlando just recently which  had a record  breaking attendance of 6,110+ up 40%  from the previous year! Our focus, has always been on branding - being able to offer our clients different & unique ideas or at the least a product they like or love to use often. The good ‘ol promo items are still the staple and we sell a ton of them, but being able to suggest a quality product the client has not yet heard of is what makes us different from the competition!

Always on the hunt for something NEW, this show was no different….We saw tons of cool ideas- a classic Retro T-shirt company, custom sculpted 3D mugs, some scented Tees & pillowcases , ingenious new Glider toys for kids and tradeshows and some beautiful Hand Made awards called Spirit Tiles for that extra special event.

As if the show and the fantastic Florida weather was not enough, our keynote speaker for the event was actor and activist Michael J. Fox! He shared with us the remarkable life lessons he learned from his struggle with Parkinson’s disease and his unique perspective that helped him to see life’s challenges as opportunities. His message was simple – don’t live the RESULT, live the LIFE. His heart-felt speech left the audience of thousands emotional and inspired. His personal experiences of how to become a happier, more satisfied person by simply recognizing the gifts of everyday life are goals we should all aspire to achieve.

With humor and honesty, Michael told us “The script of your life is not written yet. Life is about choices and the only choice I don’t have is about Parkinson’s. Everything else is up to me.”

Michael J Fox speaks on ASI Radio

My trip ended with a flight back to Toronto, in the eye of a hurricane like something out of a movie, but full of great ideas and a NEW appreciation for life!

Sherry