Have you been placing orders on the Alibaba.com platform simply because a supplier looks professional? Well, this can be very risky, as our recent experience highlights. Our team encountered a case where a buyer discovered a Chinese steel company (supplier) through the Alibaba.com platform. The buyer reviewed the information and reports displayed on the platform and was convinced to place an order. Consequently, the buyer entered into an agreement with the supplier for a 5 million RMB worth of steel order. However, after paying a 30% deposit, the supplier requested an extension of the lead time and an additional purchase of 45 tons of steel.
The buyer, understandably furious, canceled the order and sued the supplier for a refund of the deposit. Additionally, the buyer sued Alibaba.com, holding them jointly liable, citing the display of fraudulent information on the platform as the reason for trusting the supplier and placing orders with a deposit. The fraudulent information on their platform includes:
1. The claim that they are a manufacturing company while, in reality, they are a trading company.
2. The issuance and display of fake certificates and reports on the platform.
3. The publication of a video on the platform, featuring workshop, production, and office photos that are not authentic.
Alibaba.com defended itself by pointing out the disclaimer in their Supplier Assessment Report, stating that the publication of the report does not mean Alibaba endorses or recommends it. Therefore, Alibaba cannot be held responsible for any inaccuracy or omission in the report. They expressly disclaim any warranty, expressed or implied, regarding the report, including any implied warranty of merchantability, fitness for a particular purpose, or noninfringement.
In the end, the judges ruled that Alibaba.com was not held accountable.
Our legal advice for oversea buyers includes:
1. Clearly determining key terms like price, lead time, and payment terms, etc.
2. Using Alibaba’s Trade Assurance service, which provides payment protection against order delivery and product quality issues, even though suppliers may often persuade you to trade offline.
3. Avoiding rush decisions and always conducting due diligence before cooperation. This doesn’t always require hiring a third party for a formal and comprehensive investigation. Sometimes, checking social media platforms like Facebook and YouTube for negative comments or victim testimonials can serve as signs to exercise caution.
4. Arranging a field trip to the factory, if possible, to meet suppliers face-to-face and talk with them can give you an impression of whether you can work with them or not, and it will promote cooperation.
Have you dealt with the Alibaba platform, and would you like to share your stories with us? Leave your comments, as it may help prevent more victims.