Tmall, Gray Markets, and Counterfeit Goods

This article in the WSJ reports that Alibata, the firm that runs Tmall, a huge online sales site in China, is telling retailers that it will remove firms selling its products on Tmall, if the retailer agrees to open a store on Tmall. "Before Burberry opened its Tmall store, more than 50 vendors—none of them authorized by Burberry—sold the brand's products on the site." The retailers don't want to be on the same site as firms selling their products in the gray market and Tmall has agreed to remove the offending firms. 

Here are some good questions:
1. What is the distinction between counterfeit and gray-market goods?
2. What is the effect of gray-market sales on the profits of a brand?

3. Why is China's Alibaba willing to remove gray-market goods from its site?