Chinese site Alibaba went public last week in a $25 billion IPO—the largest in world history. The site does $170 billion in sales a year, more than eBay and Amazon combined, and is on track to do $1 trillion a year, which would make it the first e-tailer to reach that milestone. It may soon become the world’s largest retailer—of any type.
It also seems like a terrible place to buy a diamond.
Unlike Amazon, Alibaba doesn’t sell anything, but operates a third-party listing service—similar to eBay and Amazon Marketplace—that attracts a reported 7 million sellers. EBay has had issues with mislabeled diamonds over the years—particularly the eternal problem of simulants falsely billed as synthetics or lab-created gems. But it at least has a policy against that, if one that doesn’t seem to be enforced.
And yet eBay seems like paradise next to Alibaba—which also has issues with listing counterfeits.
When I plugged diamond into its search bar, I came across a CZ gemstone (i.e. not a diamond), another CZ (ditto), a CZ mislabeled as synthetic, and a moissanite. All of which runs contrary to the FTC Guides. And that was just the first page.
There does seem to be some legit diamonds in the diamond section, like this parcel of Congo rough, which says the buyer is “registered with Indian Export House,” but never mentions a Kimberley Process certificate. But on the first page of the listings for diamond, about half of them didn’t seem to be diamonds at all.
In its prospectus, Alibaba addresses allegations that it hosts dubious listings, saying that it responds to consumer complaints when it’s notified of them, but it “has generally eschewed a shoot first, ask questions later” approach. So I’m notifying Alibaba: Check your diamond listings.
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