The squabble between China's e-commerce giant Alibaba and the State's market regulator, caused by a product quality report, points to improved market environment and governance.

A quality report issued by the State Administration for Industry and Commerce on Jan 23 said taobao.com, China's largest consumer-to-consumer platform owned by Alibaba, had the worst performance among six online shopping sites. The quality check, conducted between August and October, showed that only 37.25 percent of the sampled goods from Taobao were authentic, compared with 90 percent for JD.com and 85.7 percent for Tmall, an Alibaba business-to-consumer site.

Following the quality controversy, Alibaba's US-trade shares lost about 4 percent and dropped to $98.45 on Jan 28, after falling to $102.94 at close on Jan 27, down by 1.01 percent from Jan 26.