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After criticizing foreign companies from Apple Inc. to McDonald's Corp. in past years, China's powerful state broadcaster has taken aim at Alibaba Group Holding Ltd., ramping up pressure on the e-commerce giant to tackle fake sales on its shopping platforms.

In a two hour, prime-time broadcast Tuesday, China Central Television said faking orders, or "brushing," as it is called in China, remains widespread on Alibaba's largest shopping platform, Taobao. The practice—which involves sellers paying people to place fake orders—pads vendors' sales figures and boosts their standing on online marketplaces.

An Alibaba spokesman said the problem plagues e-commerce sites globally and that Alibaba "is continually upgrading our technology to better detect and identify these practices."

The CCTV report comes at a time when Alibaba also faces criticism from some Western brands that it isn't doing enough to crack down on counterfeit goods on its platforms. Last week, the company's co-founder, Jack Ma, told hundreds of Alibaba employees that the company would spare no expense in ridding itself of counterfeits.

Critics say the fake sales call into question the volume of transactions conducted on Alibaba's platforms, a metric that has been cited by analysts in declaring that the Chinese company is the world's largest e-commerce platform. Alibaba counters that it uses sophisticated tools to identify and exclude fake transactions from its financials.

The CCTV broadcast is "definitely concerning," said Muzhi Li, a senior analyst at Arete Research, who rates Alibaba's stock a "negative." "To have this report about fake orders after Alibaba made so many categorical statements on what they would do shows it's still a major problem."

The 315 broadcast, as it is known in China for the date of consumer rights day, has become an annual tradition representing the rising power of consumers in an increasingly affluent country. The show typically focuses on naming and shaming multinational companies, a tactic that China typically uses to correct widespread problems within industries, consultants say.

In 2013, CCTV's report led to an apology from Apple's CEO Tim Cook after it accused Apple of skirting warranty periods and adopting customer-service policies for Chinese customers that differ from its practices in other countries.

This year's show, however, spared foreign firms and took a lighter tone than in previous years. But it focused on e-commerce, food-delivery services, mobile phones and secondhand car sales.

On the broadcast, CCTV criticized food delivery service Ele.Me, a company backed by Alibaba, for working with substandard kitchens and unregulated restaurants. The food company said on its microblog, Sina Weibo, that it would review its business and remove all violating restaurants from its service.

The broadcast also showed an undercover CCTV reporter setting up a Taobao store and enlisting the services of brushing companies to boost the store's ratings, with each fake order and rating costing between five yuan and 10 yuan ($0.77-$1.64). "With money, there is nothing you can't buy, a brusher told the journalist," a CCTV announcer said, referring to the brushing practices for Taobao and other platforms.

In November 2014, an article from China's state-run Xinhua News Agency quoted Alibaba Vice President Yu Weimin as saying that the company had found that 1.2 million sellers on its main Taobao shopping site—or roughly 17% of all merchants—had faked 500 million transactions worth 10 billion yuan ($1.5 billion) in 2013. Mr. Yu, at the time, said those transactions were "only the tip of the iceberg" and his "conservative estimate" was that tens of thousands of people in China were helping online sellers fake transactions, according to the article.

An Alibaba spokesman said Wednesday that the company has made significant progress in tackling fake transactions, and is sending a "strong message to unethical merchants: don't do brushing, you will be caught."

The company is working with law enforcement, employing sophisticated data analysis and lowering the ranking of stores—or even shutting them down entirely—if they fake transactions, it said.

In the month ended March 15, Alibaba said it had caught 220,000 sellers faking transactions on Taobao, a virtual bazaar where anyone can set up a shop. More than 6,000 of these sellers had their stores closed, while the rest saw their products displayed less visibly in search rankings, according to Alibaba.

The practice of fake transactions is "not anything new," and Alibaba appears to be doing everything it can to tackle the issue, according to Tian Hou, founder of T.H. Capital, which rates Alibaba's stock a buy.

Still, some Taobao sellers say that Alibaba's efforts to stamp out brushing have been inadequate thus far.

"Taobao keeps saying that they'll solve the problem, but it's very hard to solve," said Hua Qianzi, who opened a store on the site four years ago, selling organic baby goods.

Ms. Hua said that those sellers who have thousands of dollars to invest can easily buy better ratings for their stores. "It's not very fair," she said.

Write to Kathy Chu at kathy.chu@wsj.com and Laurie Burkitt at laurie.burkitt@wsj.com

(END) Dow Jones Newswires

March 16, 2016 09:15 ET (13:15 GMT)

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