This particular auction site has been in the spotlight recently due to its high profile IPO (Alibaba) and the possible class action by US investors due to its failure to disclose the counterfeit situation.
The chairman (Jack Ma) responded by saying that "these are not fake products, they're just web products". https://www.techinasia.com/jack-ma-taobao-fake-products-web-products/
I think what he really meant is that his site is full of night shift products - things that are made in the same factory using genuine parts, without authorisation. Are they fake products? No. However they are not genuine either, as they have never been approved for production.