Merchant attack Tmall for higher service fees

Updated: 2011-10-13 06:55


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HANGZHOU - Thousands of small merchandisers waged war Tuesday night against larger companies on, China's largest business-to-consumer platform by transaction value, after the platform announced that it would quintuple its service fees on Monday.

Starting from 9 pm Tuesday, several dozen brands, including Japanese clothing company Uniqlo and Chinese clothing stores Handuyishe and Qigege, found smaller businesses buying large quantities of their products and then asking for refunds or filing complaints to bring down their customer ratings.

By 9 pm Wednesday, around 40,000 people claiming to be businessmen gathered in an online chat room, referring to themselves as the "temporary anti-Tmall union headquarters," to discuss ways to disturb the website.

The "union" has already established its own publicity, reception, and media relations departments. Its leaders claim that they "uphold justice" and are trying to safeguard the interests of disadvantaged groups.

Operations to disturb the normal business of top-rated Tmall sellers were led by a host, who provided detailed instructions while playing music to motivate the group's members.

Members who want to suggest new forms of protest are required to queue up in the chat room. There were about 400 people waiting in line at any given time.

Part of the discussion was recorded and posted on several microblogging websites.

More than 20 online stores featured on have been forced to stop selling their products so far.

Police are currently investigating the incident. is an offshoot of e-commerce firm Taobao, China's largest shopping website.

Commodities sold on range from daily necessities such as bread and fruit to home appliance and cars. said on Monday that it will regulate entry into its online marketplace by increasing annual service fees for businesses from 6,000 yuan ($944.88) to 30,000 or 60,000 yuan, depending on the scale of the companies that apply for entry.

The fees will be fully or partially returned to the traders on the condition that their scale and service quality meet the target set by Tmall.

Under the new policy, larger businesses will barely be affected, as the fees take up only a small part of their sales, while medium and small traders may feel a financial pinch.

However, Tmall said that as long as they adhere to the company's business standards, they can get their money back eventually.

"We hope to encourage businesses to conduct self-inspections to improve their service," said Daniel Zhang, Tmall's president, at a press conference held on Wednesday afternoon in southeast China's city of Hangzhou.

Zhang said the annual transaction volume target Tmall sets for its clothing stores is only 1.2 million yuan. An estimate of more than 70 percent of the site's vendors are expected to meet the target.

"It is not a high standard. Those who cannot meet it will be deserted by the market," said Zhang.

He explained that small-sized businesses have the option of entering the Taobao Marketplace, or, a consumer-to-consumer platform that does not charge service fees.

A seller nicknamed "fltester" said that he would not accept Zhang's solution.

"Alibaba Group president Jack Ma could help a great many people with entrepreneurial spirit to become self-employed. But now he is making tens of thousands lose their jobs," he said.

Tmall approved the entry of businesses of any size when it first opened in order to secure rapid expansion.

The company's new regulation is believed to be part of its efforts to bring order to its online shopping platform. Customers have repeatedly complained about cases of fraud and the sale of counterfeit products, demanding the company to take action.

Set up on April 4, 2008, the platform now features more than 400 million registered users, 50,000 registered businesses and 70,000 commodity brands.