It's the first time the firm has taken legal action against counterfeiters.

Alibaba sued the vendors for allegedly selling fake Swarovski watches on its Taobao platform.

The move comes just two weeks after the company was put back onto the US's "notorious markets" list over failing to curb the sale of counterfeit goods.

Alibaba had been taken off the list four years ago, but US authorities say the firm's online platform Taobao is being used to sell "high levels" of fake goods.

The lawsuit against two unnamed vendors claims 1.4 million yuan ($201,671, £163,419) in damages, the company said.

The counterfeiters were found out during a "test-buy purchase programme" when the watches they sold were confirmed by Swarovski to be fakes.

In a subsequent police raid, more than 125 counterfeit watches worth nearly 2 million yuan were confiscated.

Alibaba said it would continue to crack down on counterfeiters and that it already had a list of other suspected vendors who would face similar action.

"We want to mete out to counterfeiters the punishment they deserve in order to protect brand owners," Alibaba said in a statement.

The Chinese online retailer and its market place Taobao have long been accused of being a platform for counterfeit goods.

In May last year, Alibaba was suspended from the International Anti-Counterfeiting Coalition (IACC) watchdog over piracy concerns.

Alibaba, China's biggest online retailer floated on the New York Stock Exchange in September 2014 and broke records by raising $25bn.