E-commerce platform Tmall said that it will change its store-opening policies in an effort to lower merchant costs, just days after Chinese regulators penalized parent company Alibaba for anticompetitive behavior.
Why it matters: This change in store-opening rules is the first since 2009 for Alibaba’s B2C e-commerce platform. It follows a record RMB 18.2 billion ($2.8 billion) fine levied on Alibaba on Saturday for “forced exclusivity,” a practice where platforms pressure merchants to use only one company’s platform or services.
Details: Under the new store-opening processes, merchants will not be required to prepare company materials such as a “Brand Evaluation PowerPoint” for review, according to a Chinese media report. They will instead be assessed on their store performance during a seven-month trial period.
- The revised policy requires that merchants undergo four separate evaluations at the 30-day, 90-day, 150-day, and 210-day marks, the report said. Tmall will review the store’s transaction volume, product, logistics, retail experience, consultation experience, and complaints-filing process. The platform will first implement the new guidelines in the categories of beauty, personal care, home cleaning, and maternity.
- Tmall merchant Li Zhongtai told e-commerce media outlet Ebrun that to open a Tmall store, merchants previously were required to have five certifications, including a business license and a trademark, as well as an operations plan and factory pictures. He said that the new policy will lower the entry barrier for merchants, who can now focus efforts on actual store operations.
- Alibaba will also waive select fees for sellers on its e-commerce marketplace Taobao, allowing them to use premium store discount tools (in Chinese) for free. These include tools to issue vouchers, create item packages, and to set customized or blanket discounts on store products.
Context: After pledging to end forced exclusivity in a company statement, Alibaba chairman Daniel Zhang said in a Monday briefing that the company would spend billions to lower merchant costs. CFO Maggie Wu said that the e-commerce giant’s merchant-support initiatives will include reduced fees and charges for sellers, and increased investment in business growth measures.