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Ministry intervenes in Taobao controversy

(China Daily)

08:16, October 17, 2011

BEIJING / SHANGHAI - The Ministry of Commerce intervened on Saturday in a bitter dispute between Taobao Mall, China's top online retail platform, and small business owners sparked by a massive hike in membership fees.

Taobao Mall announced last week a minimum five-fold, and a potential ten-fold, increase in membership fees. This ignited an immediate protest by the owners of small businesses who disrupted online services by placing orders and then canceling them after leaving disparaging remarks.

The ministry expressed its concern at the protests and vowed to support small businesses and stabilize prices, according to a statement on its website.

It also said that Taobao Mall should listen to small business owners and insisted that protests should be within legal parameters.

Taobao Mall said last Monday that it would increase annual membership fees from 6,000 yuan ($940) to between 30,000 yuan to 60,000 yuan, depending on the type and scale of the business.

Fees will be fully or partially refunded to a shop if its scale and service quality meet set criteria, Taobao Mall said.

Cash deposits also increased from 10,000 yuan to a maximum of 150,000 yuan, depending on the category of goods.

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wende at 2011-10-1771.255.93.*
Advice to Taobao: a savvy entrepreneuer would not make huge price increases and it will tell customers well in advance so that they can anticipate. It appears that Taobao needs training in marketing.
elee at 2011-10-17183.39.28.*
It is important and necessary to see enterprise improvements in the management and control in fighting frauds, fakes and scams in China in which such mischief is becoming an epidemic for the sake of getting rich. However, Taobao or Tmall ought to trim up its own quality first of all by announcing its intent openly & publicly with at least 3 months prior notices to all its clients. Did Taobao or Tmall perform this task to post itself as a fair and quality orientated company? Trade and Commerce Ministry might have left many legal loopholes unattended for a long time or lacking the expertise to supervise its industrial and commercial portfolio in China. Public and Enterprise Fairness must be instilled administratively nationwide; else loopholes will cause nasty madness like those "OWS" happening globally. Question is also raised herewith: Why did Taobao/Tmall choose a timing like now to stir up such public storms?

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