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Our reporter Li Li reports from Shanghai

With the relaxation of the "refund only" policy as a guide, Taotian Group is entering a new round of intensive adjustments.

A series of adjustments that dazzled the outside world included but were not limited to: loosening the "refund only" rule, granting processing authority to merchants whose store comprehensive experience scores were ≥ 4.8 points; changing the traffic rules, using experience points as the core basis for traffic allocation. At the same time, Taobao charged a basic software service fee of 0.6% for confirmed transactions on the platform.

Many industry insiders believe that a series of changes suggest that Taobao is bidding farewell to its low-price strategy, no longer "imitating" Pinduoduo, and returning to its own way. According to Wandian, following Taobao and Douyin e-commerce, Pinduoduo also adjusted its business focus in the second quarter of this year, from pursuing commercialization and increasing profits to re-making GMV (gross merchandise volume) as its first goal.

Why do e-commerce companies re-emphasize GMV after collectively selling at low prices? When platforms once believed that "low prices are the core competitiveness", the market did not usher in the imagined consumer carnival. Why is the low-price war unsustainable? A reporter from China Business News found that the reason behind the intensive adjustments of e-commerce platforms is that the low-price war that lasted for more than a year has reached a stalemate; if the platforms want to get rid of the "low-price" curse, they need a series of in-depth adjustments.

It is worth noting that "from a macroeconomic perspective, the destocking cycle has basically ended, most industries have completed the survival of the fittest, and companies have begun to regain pricing power." Tong Zhibin, a writer for Sibian Finance, believes that platforms and merchants are experiencing a new round of game.

"Refund Only" Loose

"Refund only" is the most controversial platform clause in the e-commerce field in 2024.

At the end of 2023, Taobao released a public notice on the change of the "Taobao Platform Dispute Handling Rules". The new platform will be based on big data capabilities and multi-dimensional identification to directly provide "quick return and refund" or "refund" support for after-sales claims initiated by buyers that meet relevant circumstances. Subsequently, JD.com also quickly followed suit.

These measures are considered to be "following" Pinduoduo, and "refund only" has become the "standard" of e-commerce platforms. Originally intended to "improve user experience and protect consumer rights", the "refund only" policy was strongly opposed by merchants during this year's "6.18" promotion, and was considered to have further increased the return rate and was abused to a certain extent by "wool parties".

Taobao recently announced an optimization of "refund only". According to the reporter's confirmation from Taobao, this optimization mainly focuses on two aspects. First, the abnormal behavior recognition model of refunding only after receiving the goods has been upgraded to reject the "refund only" request with abnormal behavior. Taobao's upgraded "refund only" recognition model has enhanced the recognition of abnormal behaviors such as abnormal high-frequency refund only, empty package with less items sent back, and high-frequency refund of counterfeit goods. At the same time, it pays close attention to unreasonable refund behavior to protect the rights and interests of merchants.

Second, based on the new experience score, the platform will reduce or cancel after-sales intervention for high-quality stores: for merchants with a comprehensive experience score of ≥4.8 points, the platform will not actively intervene through Wangwang and support "refund only" after receiving the goods, and encourage merchants to negotiate with consumers first; for merchants in other segments, the platform will grant different degrees of autonomy based on the experience score and the nature of the industry. The higher the experience score, the greater the merchant's disposal power.

Once a "magic weapon" for Pinduoduo to improve user experience, why did "refund only" encounter multiple obstacles? "The fundamental reason is that the basic product pallets of different platforms are different." Some people in the e-commerce industry believe that Pinduoduo's early product pallets were mostly agricultural products and white-label products, low-priced goods or fresh products. Compared with the complicated return process and reverse logistics costs, "refund only" is a more efficient approach; it may not be applicable to Taobao and Tmall, which have rich categories and a large number of brand merchants.

Regarding the original intention of the "refund only" design, a relevant person in charge of Pinduoduo told reporters that Pinduoduo started out in agriculture. Fresh produce, fruits and other products are subject to storage time and cannot be reverse cold chain logistics, so returns and exchanges are unlikely to be realized. Without a complete after-sales guarantee, consumers will have a poor experience and consumer demand will be suppressed. "A series of strategies such as zero commission for agricultural products and only refunds in special circumstances are Pinduoduo's solutions to this proposition." The person in charge said.

However, the reporter noticed that not only Taobao loosened its "refund only" policy, but Pinduoduo's attitude was also subtly changing. Pinduoduo told the reporter that "refund only" is a reflection of Pinduoduo's "consumer first" concept, but this policy is not a "brainless" stand for consumers. If merchants encounter unreasonable "refund only" applications, they can appeal to the platform through normal channels. The platform also supports merchants to protect their rights against the wool party through legal means.

Many industry insiders have noticed that new regulations at the policy level are coming. From September 1, the State Administration for Market Regulation's "Interim Provisions on Anti-Unfair Competition on the Internet" will officially come into effect. Article 24 states that platform operators shall not use service agreements, transaction rules and other means to impose unreasonable restrictions or impose unreasonable conditions on transactions, transaction prices and transactions with other operators within the platform. In this context, adjusting the "refund only" becomes a matter of course.

The rate design puzzle

Among the series of adjustments made by Taobao, the rate changes summarized by the industry as "two increases and one decrease" are the "mysterious operation" in Alibaba's series of changes. However, observers close to Alibaba believe that this reflects the layered design of Alibaba's e-commerce market, and the gameplay of different e-commerce sectors will also be layered in the future.

Taobao recently revised its merchant rules, charging a 0.6% "basic software service fee" for confirmed transactions on the platform from September 1. At the same time, Tmall will cancel the platform's annual software service fee: new merchants entering from September will not have to pay, and merchants who have already paid the annual fee will be refunded in batches according to settlement rules.

On the other hand, Xianyu, one of Alibaba's "Four Little Dragons" and a strategically innovative business, officially announced that it plans to charge sellers a basic software service fee (charged at 0.6% of the actual transaction amount of a single order, capped at 60 yuan).

"Taobao's GMV is rebounding, and Tmall's charging model is commission plus advertising fees. Xianyu has had a high market share in the past two years, but has not done much commercialization work." Tong Zhibin analyzed that the purpose of Alibaba's operation is to increase the monetization rate and make use of existing profits.

The monetization rate is an important indicator to measure the monetization ability of e-commerce platforms. The calculation formula of the monetization rate is: commission + advertising revenue / GMV. It represents the platform's ability to make money, that is, the "toll" paid by merchants to do business on the platform.

The monetization rate of representative e-commerce companies in 2023 compiled by Guosen Securities shows that the monetization rate of Douyin e-commerce will soar to 9% in 2023, the monetization rate of Pinduoduo will exceed 4.5%, and the monetization rate of Taobao Tmall will be about 3.77%.

Specifically comparing Taobao and Pinduoduo, Taobao's monetization rate in 2023 is about 1.1%, while Pinduoduo's monetization rate is 4 times that of Taobao, about 4.4%. It is not difficult to understand that the tiered operation of Alibaba's e-commerce sector is based on the characteristics of different platforms to improve monetization efficiency.

This strategy was also hinted at when Alibaba released its financial report. On May 14, Alibaba released its financial report showing that Taobao and Tmall's online GMV achieved double-digit year-on-year growth, and Taobao's customer management revenue (CMR) also increased by 5% year-on-year.

Alibaba Group CFO Xu Hong revealed at an analyst conference that Taobao and Tmall both achieved strong growth in GMV. The decline in monetization rate is because Taobao's GMV growth exceeded Tmall. Xu Hong also mentioned that the overall monetization rate will have further room for improvement, and the proportion of paying merchants among small and medium-sized enterprises is still relatively low. With the launch of new advertising products, merchant adoption rates and incremental spending of paying merchants have the potential to increase.

According to the first quarter results of the 2025 fiscal year released by Alibaba on the evening of August 15, Taobao's online GMV still showed high-digit growth, and customer management revenue only increased by 1% year-on-year, which was partially offset by the decline in monetization rate. "It can be seen that the optimization of Taobao's monetization rate will become the top priority of Taobao's system reform in the future," said Tong Zhibin.

Merchants have different attitudes towards Taobao's new fee rules. A seller who has been operating on the Taobao platform for ten years told reporters: "In the recent platform promotion, the official introduction for the first time requires merchants to pay promotion commissions." According to the "2024 Taobao Olympic Games Season" registration form provided by the merchant, merchants who sign up for the promotion are required to pay a 2%-5% software technology service fee according to different categories.

The merchant told reporters that compared with this, the daily basic software service fee of 0.6% is acceptable, and paying a higher proportion of "commission" during big sales is more like a test, "if there is no objection, it may become the norm in the future."

It can be seen that from the relaxation of "refund only" to the change of rate policy, the platform and merchants are still testing and playing games with each other. Under the situation of weak consumption, the platform needs to help merchants increase sales and profits, reduce costs and increase efficiency. At the same time, the platform obviously hopes to make more money from merchants, provided that the merchants are not scared away.

All for GMV

However, compared with the relaxation of "refund only" and changes such as rate increases and decreases, digital industry analyst Hao Zhiwei believes that the most important change is that Taobao is weakening its low-price strategy, and the traffic distribution logic has been changed from the previous "five-star price power" to distribution based on GMV and store experience points.

"There have been signs of change since March this year, with five-star pricing no longer emphasized in some categories." According to Hao Zhiwei's observation, although price is still an important weight indicator, commodities, logistics, service experience, etc. are also important considerations.

In June this year, a source said that Taobao is fully implementing a new rating system - "Store Experience Points" and "Product Experience Index" to replace the previous DSR (Taobao's previous seller service evaluation system). In other words, store and product traffic will be directly linked to the experience points, and Taobao is trying to allocate traffic to merchants who can provide better services.

In addition, it is reported that Taotian Group CEO Wu Yongming made it clear internally at the beginning of 2024 that GMV would be the first indicator and return to shelf e-commerce. In the view of people close to Alibaba, this reform of Five Star Price Power is a specific business action to implement this instruction.

However, it is not easy to get a high score in the "store comprehensive experience score". A merchant confirmed to the reporter that, for example, for "refund only", the store comprehensive experience score must be ≥ 4.8 points, which means that the average score of the three assessments of product quality, logistics speed, and service guarantee must reach 4.8 points or above.

There are not many stores that can achieve such a high score. The reporter checked the list of Nordic Japanese furniture stores on the "Taobao Best Stores List" and found that the store ranked first had a comprehensive experience score of 4.8 points, which was higher than 52% of its peers; the store ranked second in popularity had a comprehensive experience score of 4.7 points, which did not reach the official setting of 4.8 points to obtain processing authority.

"If it involves the global shopping category, the goods involve entry and exit customs declarations and unified delivery, which will naturally have a disadvantage in logistics points." The above-mentioned merchant explained to reporters that as long as one of the items is lagging behind, it will be difficult to get a high score.

In Hao Zhiwei's view, the farewell to the low-price strategy means that Alibaba has begun to return to its own rhythm. If it continues to compete with Pinduoduo by low prices, it will be dragged into an endless war and a negative cycle. "The genes are different, and the lowest price on the entire network is not suitable for all platforms. At least for Taobao and Douyin, the users, levels, consumption habits and emotions they target are different."

Interestingly, except for JD.com, which sticks to low prices, Taobao, Tmall, Douyin e-commerce, and Pinduoduo are now starting to pay more attention to GMV. Why are platforms weakening their low-price strategies? In Tong Zhibin's view, "the data trend at the macroeconomic level shows that the inventory reduction cycle has basically ended, most industries have completed the survival of the fittest, and companies have begun to regain pricing power, and a new round of competition between platforms and merchants has begun."

"Tik Tok, Kuaishou, and Pinduoduo started to take off rapidly in 2020," Tong Zhibin analyzed the development of e-commerce over the years and found that 2020 can be regarded as a watershed year for my country's e-commerce industry. Before that, the industry development was driven by two wheels (user annual order volume and average unit price), showing a beautiful state of rising volume and price, but then user orders continued to increase, but the customer unit price began to fall sharply. Under the economic background at that time, merchants began to give up their pricing power and transitioned from pursuing profits to pursuing "survival".

The online retail industry is now on the eve of a new round of changes. After more than a year of price wars, platforms have begun to break the superstition of low prices and find a methodology that suits them. "The core competitiveness of a platform will ultimately be reflected in GMV," Tong Zhibin further pointed out, "Low prices will not be the permanent main theme, and merchants will not be passive forever."

"Avoid if it can be avoided, accept it if it cannot be avoided, and then find ways to make adjustments." A merchant told reporters that multi-platform operation is one method, and working hard to improve private domain conversions are all ways, and offering low prices should not be the only way out.