Kuaishou has launched a new campaign to prevent shop owners on the platform from redirecting users to external channels. Shop owners do this to avoid incurring charges when completing transactions. The Chinese short video app looks to tighten up its e-commerce offering.
Why it matters: Content-driven e-commerce is a growing trend in China as more and more sellers use short video apps like Kuaishou and Douyin as effective ways to promote products. Some merchants encourage shoppers to pay privately via WeChat or Alipay to avoid extra fees and also to reduce their responsibility for after-sales service.
- Chinese short video apps are doubling down on e-commerce features in the hope of commercializing their user base, but these new channels are facing increasing challenges to bring order to their new-yet-flourishing ecosystem.
Details: Kuaishou’s new guideline specifies that users or promoters who sell outside of official payment channels like Kuaishou’s in-house feature, as well as e-commerce partners like Taobao, Youzan, and Pinduoduo, will be subject to tighter restrictions.
- The short video app, a rumored investment target of Tencent, has shut down 1,038 online stores in the app and delisted more than 30,000 products so far.
- The company claimed the user satisfaction index has increased by 50% after the campaign.
- From September, the company will block private trading covering eight product categories, including jewelry, skincare products, foods, medicine, pesticides, and antiques, among others.
Context: China’s new e-commerce law, which came into effect at the beginning of this year, broadens the definition of e-commerce operators to include players who do business through various online channels such as messaging apps like WeChat and video apps.
- Kuaishou adjusted its commission system for stores in July to boost its e-commerce offering and set up a bonus pool for stores offering quality services.