2024-08-02
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Subtracting from merchants means adding to users
Author: Ye Zengwen
Cover source: Alibaba official website
Jack Welch, known as the "world's number one CEO", once wrote in his book "The Essence of Business": "The essence of business is to maintain balance." This sentence is regarded as the golden rule by countless entrepreneurs.
In the e-commerce field, some people once regarded "refund only" as a balance point between merchants and users. But now, this balance point, which was originally set to improve user experience, is facing the risk of imbalance: unreasonable refund only emerges in an endless stream, and even professional "wool parties" have emerged. Many of the "injured" merchants have withdrawn sadly.
There is nothing wrong with the strategy itself, but how to establish a fair and transparent processing mechanism tests the governance capabilities and management wisdom of each platform and the entire industry.
When the balance was unbalanced, Taobao took the lead in proposing a solution. Recently, Taobao announced that it would return the right to handle refunds to merchants who are able to provide high-quality services, and encourage merchants to negotiate with consumers to resolve the issue.
What kind of waves will Taobao's correction bring to the e-commerce industry?
Taobao, which connects tens of millions of merchants and 900 million users, has officially taken action against its controversial refund-only policy.
Taobao recently announced that it would optimize its refund-only mechanism. In the new rules that came into effect in August, for merchants with a comprehensive store experience score of 4.8 or above, the platform will not actively intervene through Wangwang to support refunds after delivery, but will encourage merchants to negotiate with consumers first.
While returning more autonomy to merchants, Taobao will also provide multiple after-sales service plans for merchants to choose from, guiding merchants to continuously optimize after-sales services and reduce disputes and losses caused by refunds alone. At the same time, Taobao has also optimized the refund-only appeal process. After the merchant files an appeal, the platform will ask a third-party testing agency to conduct random inspections on the products. If the inspection passes, the platform will compensate the merchant for the loss.
Compared with the previous one-size-fits-all refund-only mechanism that favors consumers, Taobao’s new rules give merchants the right to say “no”.
The so-called refund only means that when a user has a dispute with a merchant during the shopping process, he or she can initiate a refund only request without having to send the goods back. This rule, which was launched in 2021, has gradually become the standard for e-commerce platforms.
The original intention of refund-only was to improve user experience, but in the actual implementation process, it caused trouble for some merchants.
On the one hand, various platforms have previously often implemented one-size-fits-all penalties, which may lead to misjudgment and cause certain losses to merchants.
On the other hand, the refund-only mechanism also allows some "wool-buying parties" to take advantage of the loophole. They choose to only refund after purchasing the goods, and then sell the free goods on second-hand platforms.
Some people have even made a business out of "refund-only teaching", teaching others online how to use refund-only to fleece merchants. In their "teaching materials", they explain in detail how to find loopholes in customer service's language, how to increase the success rate of applying for refund-only, and how to respond to inquiries from platform customer service.
Faced with "professional" wool parties and unreasonable refunds that exploit loopholes in the rules, merchants are miserable. Not only do they need to bear the loss of goods and shipping costs, but they may also be fined by the platform due to user complaints.
The balance between merchants and users has been broken, and the controversy surrounding refunds has grown. Some merchants have been forced to withdraw from the platform, and some merchants have driven thousands of miles to visit users for a product worth 10 yuan.
When the extensive rules revealed their drawbacks, Taobao tried to put the balance back on track by optimizing the refund-only rules.
Taobao tried to solve the pain points of merchants fundamentally: what they opposed was not just refunds, but the imperfect and unfair mechanism.
In this optimization, Taobao will give merchants different degrees of autonomy based on experience points and industry nature. This also points out a clear business direction for merchants. As long as they work hard to provide good service, the higher the experience points, the greater the autonomy they can get in after-sales service.
By replacing punishment with encouragement, Taobao guides merchants to provide better services to consumers.
Listening to merchants and solving their pain points is easier said than done. The experience Taobao has gained over the past 21 years is to keep doing subtraction.
While optimizing the refund-only policy, Taobao also announced that Tmall will cancel the platform's annual software service fee from September. Previously, merchants in different categories on Tmall had to pay an annual fee of 30,000 to 60,000 yuan.
Since the beginning of this year, Taobao has been intensively adjusting its rules around merchants, all with the goal of reducing the burden. Behind each reduction is often a long-standing industry pain point.
For example, the high cost of freight insurance has always been a headache for merchants, and it has also attracted some "wool parties". For example, if the merchant's freight insurance is 10 yuan, the wool party will choose a cheaper logistics after the refund to earn the freight price difference.
After Taobao adjusted its rules in March this year, the platform can link up with logistics to automatically intercept goods in transit for freight insurance orders, and merchants do not need to bear the courier interception fee.
In addition, Taobao also provides nearly 10 services to all brands and merchants, including AI management efficiency tools, free business advisors, and logistics subsidies for delivery, which attracted merchants to flock in. In the first quarter of 2024, the number of new merchants on Tmall increased by 60% year-on-year.
In the era of stock competition, merchants are anxious about where to find new growth. While reducing the burden on merchants, Taobao also conveys a message: good service = good growth.
The purpose of reducing the burden on merchants is to encourage them to pay attention to user experience; the introduction of the experience score system is to encourage merchants to obtain good traffic by providing good services. The higher the store experience score, the higher the ranking on Taobao's homepage, search and other scenarios, which often means certain growth.
The various changes in Taobao this year have shown that it has made "user first" its top priority, improving user retention and repeat purchases by improving user experience.
The financial report shows that in the first quarter ending March 31, Taobao's GMV and order volume both achieved double-digit year-on-year growth, and the number of 88VIP members exceeded 35 million, also maintaining double-digit growth. This achievement should be attributed to its price competitiveness and strategy focusing on user experience.
Since its inception till now, helping merchants reduce costs and increase efficiency has always been a clear line of operation for the Taobao platform.
Based on this starting point, Taobao has repeatedly proposed to change the rules and strategies of the entire e-commerce industry.
These "burden-reducing" actions have been carried out throughout Taobao's 21-year development process and have never deviated from the original intention of Taobao's establishment: to make it easy to do business in the world.
What form should e-commerce take in the future: shelf e-commerce, content e-commerce or AI e-commerce? In fact, no matter what form e-commerce takes, its essence is to serve merchants and users well in a fair and reasonable business environment.
Maintaining the balance of the ecosystem is crucial, which means that in the entire ecosystem, the platform that is in charge of environmental regulation cannot favor any one party, that is, the interests of merchants and users are equally important.
As a provider of goods and services, if the interests of merchants are not protected, even if the strategy is well-intentioned, it will continue to damage the interests of merchants in the long run and will be detrimental to the positive development of the entire market. For example, refunds were originally intended to reduce the user's after-sales process and improve user experience, but as more and more unreasonable refunds were made, it became difficult for merchants to continue, and eventually the phenomenon of bad money driving out good money appeared in the market.
Fairness and rationality are necessary and sufficient conditions for the healthy development of the e-commerce ecosystem.
The relationship between merchants and users has never been one of confrontation but cooperation. Taobao has always believed that only in a fair business environment can merchants provide users with a better consumer experience. After all, it is unsustainable to harm the interests of one party while protecting the interests of another.
Especially at a time when the whole industry is "competing for service", Taobao has chosen to reward merchants instead of punishing them. Merchants who do well will be rewarded and fully protected for their rights and interests, so as to encourage them to provide better services. Only in this way can the industry ecology avoid the misunderstanding of chaos.
As the largest e-commerce platform in China, Taobao connects 900 million users and tens of millions of merchants. How to handle the relationship between the two in the future? Taobao's answer is not only crucial to Alibaba Group, but also has important reference and reference significance for the entire e-commerce industry.
Previously, some people thought that Taobao was unclear about "who the users are". However, in the latest letter to shareholders, Alibaba Group has already clearly defined who the users are. The management said: "Users first means that from business purpose to product concept, we design business goals and product processes with users as the first priority, with the goal of creating the greatest value for consumers and merchants on the platform."
In other words, merchants and consumers together constitute Taobao's users. Taobao will return to entrepreneurship in the next ten years, that is, to serve these two major users as always, so as to promote the positive development of the entire e-commerce environment.
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