Mainland internet giant Alibaba Group will invest up to 1.8 billion yuan (HK$2.2 billion) in privately held subsidiary Taobao Mall to support the small merchants that do business through the country's biggest online shopping platform.
Group chairman and chief executive Jack Ma Yun unveiled the spending programme yesterday in an apparent response to heated protests made by thousands of small online vendors against Taobao Mall's recently announced plan to raise its service fees by January 1 next year.
The Ministry of Commerce intervened in the intensifying dispute over the weekend when it advised the management of Taobao Mall, which hosts about 50,000 registered online sellers, to listen to the complaints raised.
'The media has made a big deal of the price increase, saying we are driving out the smaller sellers,' Ma said.
'We admit there were problems with our decision-making and we didn't do a good job in communication.'
At a press briefing in Hangzhou, Taobao Mall president Daniel Zhang Yong said the sharp increase in fees as well as hefty merchant security deposits has been delayed for nine months.
Most of Taobao Mall's existing merchants will not have to pay the higher rate until October 1 next year.