Ministry enters Taobao Mall row

PUBLISHED : Monday, 17 October, 2011, 12:00am
UPDATED : Monday, 17 October, 2011, 12:00am


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The Ministry of Commerce has intervened in an intensifying dispute between mainland online shopping site Taobao Mall and thousands of small business owners, who are protesting online against the website's membership fee increase.

The ministry issued a statement on Saturday night saying it was paying close attention to the issue, adding that relevant government departments would move to stabilise prices and support small businesses.

The ministry asked Taobao to listen to small business owners' complaints, but also told the latter to express their views via lawful channels.

Taobao Mall, the mainland's largest business-to-consumer (B2C) e-commerce platform, said on Monday that it would increase its annual membership fees from 6,000 yuan (HK$7,300) to between 30,000 yuan and 60,000 yuan, depending on the type and scale of the business.

The move angered thousands of small business owners, who protested online the following day by buying goods from bigger vendors and then asking for refunds or filing complaints to cause disruption. Asking for refunds lowers the online rankings of the affected shops.

Small businesses claim the fee increase would seriously hurt their finances while larger businesses have the resources to shrug off the fee rise.

One report said that more than 50,000 people claiming to be Taobao Mall businessmen gathered in an online chat room to discuss more ways of disrupting the website. On Saturday, however, Taobao took issue with that figure, saying fewer than 1,000 of the 50,000 were Taobao vendors.

Taobao also said business owners recoup the fees if daily transactions reached 3,000 yuan or more, which was possible for most vendors. It said its fee rise was aimed at improving the quality of products on its online shopping platform. The proposal was raised with business owners three months ago.

Taobao Mall had 32.8 per cent of the mainland's 54.2 billion yuan B2C online transactions in the second quarter, according to Analysts International. Products sold on it range from daily essentials to household appliances, cars and fashion items.

Since its establishment in April 2008, Taobao Mall now hosts more than 400 million registered users, 50,000 registered businesses and 70,000 brands, according to a Xinhua report, which added that Taobao was trying to clean up its online shopping platform. Consumers have repeatedly complained about fraud and counterfeit products. Alibaba Group, which is 40 per cent owned by Yahoo, operates Taobao Mall.


The approximate number of product lines on Taobao Mall. They include everything from food to clothes to technology