Alibaba’s China-focused online shopping platform Taobao is streamlining its refund process, in a move that mirrors rival Pinduoduo’s strategy for retaining customers.
The new rules for handling refund issues took effect on Tuesday, allowing the platform to use big data analysis of store quality and complaint frequency to handle returns and refunds directly when buyers make after-sales requests that meet certain conditions.
Why it matters: This update brings Taobao’s after-sales mechanism closer to that of rival Pinduoduo, with the company emphasizing a commitment to consumer rights and cutting the influence of merchants in the refund process.
Details: Pinduoduo’s “Refund only” strategy has met with controversy in recent years. The approach, coupled with Pinduoduo’s consistent low-price strategy, has attracted a large number of price-sensitive consumers. Merchants on the other hand have come to find the platform’s rules too strict, generating widespread dissatisfaction.
- According to Taobao’s new rules, if a seller exceeds the agreed-upon delivery time or sends goods without the buyer’s consent, the system will allow the buyer to request a refund automatically. The platform also lets buyers apply for a refund if they refuse to sign for a delivery on arrival. Previously, refunds had to be processed via the seller.
- Taobao is providing a quick appeals channel for merchants however, permitting them to appeal refunds within a 30-day period.
- One merchant who sells on multiple platforms told local outlet Jiemian that shoppers have upped their expectations of e-commerce platforms since experiencing how simple it was to apply for a “refund only” on Pinduoduo, the domestic sibling of runaway e-commerce success Temu.
Context: In recent weeks, Alibaba executed an executive level overhaul at Taobao, its most-profitable Chinese e-commerce group. Alibaba CEO Eddie Wu tapped six young leaders to take charge of key operations at twin e-commerce sites Taobao and Tmall, after he took the reins of the business on Dec. 20.
- The flurry of adjustments follow publication of an employee memo by founder Jack Ma in which he wrote “I firmly believe Alibaba will change and reform.”
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