Over 40 Percent of China's Online Sales Counterfeit or Bad Quality

SHANGHAI, China — More than 40 percent of goods sold online in China last year were either counterfeits or of bad quality, the official Xinhua news agency said, illustrating the extent of a problem that has bogged down the fast-growing online sector.

According to the report, which was delivered to China's top lawmakers on Monday, just under 59 percent of items sold online last year were "genuine or of good quality", Xinhua said.

China has been trying to shake off a notoriety for pirated and counterfeit goods, long a major headache for global brands targeting the Chinese market from iPhone maker Apple Inc to luxury retailer LVMH.

Chinese e-commerce giant Alibaba Group Holding Ltd has been lobbying to stay off a U.S. blacklist for fakes after coming under renewed pressure this year over suspected counterfeits sold on its shopping platforms.

The report called for "accelerated legislation in e-commerce, improved supervision and clarification of consumers' rights and sellers' responsibilities". It added these were needed due to the rapid emergence of online sales, which grew 40 percent last year to 2.8 trillion yuan ($441.84 billion).

China wants to boost protection for consumers online, where there is still a lot of uncertainty about how consumers can claim compensation or hold online vendors to account. The report added customer complaints about online orders hit 77,800 last year, a steep jump of 356.6 percent against 2013.

By Adam Jourdan; editor: Michael Perry.