Pinduoduo and merchants in the vortex of "malicious orders"

Author: Chen Yangyuan

A tug-of-war is still between Pinduoduo and many Pinduoduo merchants.

In the past ten days, many Pinduoduo merchants have become buyers, and after placing orders in "Pinduoduo self-operated stores" and "brand stores", they quickly refund money, and send screenshots of "refund-only" applied after delivery to more merchant groups, even on platforms such as Douyin, Xiaohongshu, and Weibo.

Merchants see this as a "counterattack" against Pinduoduo. In their view, Pinduoduo's consumer-facing "refund only" rule in the past was not fair to merchants, and they hope that this action can make Pinduoduo re-pay attention to the impact of its own rules on merchants.

As of press time, Pinduoduo has not responded to the above incidents.

However, the impact of the incident is still fermenting, and the "Duoduo Welfare Society", which is regarded as a self-operated store of Pinduoduo, urgently went offline 4 hours after the new product was launched, many brand merchants were forced to suspend business, and many merchants participating in tens of billions of subsidies hurriedly made "innocent statements". At present, there are still merchants who have joined the ranks of "attacking" Pinduoduo, and Pinduoduo's insistence on platform mechanisms such as "refund only" has not changed.

In this conflict, which was regarded by Pinduoduo as "bombing stores" and "organized and premeditated smashing", and by participating Pinduoduo merchants as "cracking down on Somali e-commerce", what was revealed was a huge separation between the value of the platform and the interests of some merchants. Where does the contradiction come from? And how does it end?

Scourge "refund only"?

A number of merchants confirmed to CBN that the main reason for their "attack" on Pinduoduo was their past grudge against "refund only".

"I had one yesterday, and six days after the guy's shoes were signed, he sent me a picture saying that there was a pair of insoles missing. I said you've been signing for six days, so either I'll reissue you a pair of insoles, or you can apply for a return and refund. As a result, he directly applied for platform intervention, and the platform banned me and directly only refunded. I can't understand. Wang Wei, who has been operating in Pinduoduo for many years, told First Finance and Economics that last year, his store issued about 300-500 orders a day, and would encounter dozens of "refunds only" every day.

Wang Wei said that superimposing the cost of goods, delivery manpower, logistics and other costs, "only refunds" had a great impact on his store's profits. For example, last year he sold a pair of shoes for about 20 yuan, which was very cheap, but by the end of last year, he had to add more than 25 yuan to have profit margins.

"Yesterday, a customer in our store bought a desk lamp, he may not have seen the lamp described as yellow, and asked why the light is yellow on the customer service interface. Before we could answer, the Pinduoduo system recognized the problem, directly intervened to silence us, and after a few seconds, only the refund was successful. Li Xin, another Pinduoduo businessman, told First Finance and Economics that his feeling is that in the past one or two years, Pinduoduo has produced more "refund-only" than before, especially the "refund-only" brought about by buyers without applying and automatic intervention by the platform has often occurred in the past half a year, which "tests the user's humanity."

At this time, directly throw the screenshot (calling on the merchant to use "refund only" to impact the content of the Duoduo Welfare Society to the business group, and everyone will definitely spread it ten to a hundred. Li Xin believes that most sellers have been holding back (only refunds) for a long time. "Let Pinduoduo also experience 'refund only'."

Around "refund only", Pinduoduo has a different understanding from these merchants.

The "refund only" rule defined by Pinduoduo means that for the order goods with problems such as wrong goods, unqualified quality, malicious fraud, etc., the platform will make a comprehensive judgment from multiple dimensions such as product value, product characteristics, information description, after-sales complaints, as well as consumers' shopping habits and consumer credit, and support consumers' refund claims as appropriate. If consumers have malicious purchases, malicious returns, etc., the platform will also record the consumer's in-platform consumer credit evaluation accordingly, reducing the frequency of providing similar service guarantee upgrade measures.

"Some people's justification of 'bombing shops' on the basis of the platform's 'refund only' rule is untenable." 'Refund only' is clearly defined and has been optimized and iterated many times. After the incident fermented, an official junior of Pinduoduo mentioned it in the screenshot of the Internet.

Fragmentation exists in many places. On the basis of the "refund only" policy, Pinduoduo provided merchants with a channel entrance to appeal, which was originally Pinduoduo's protection of merchants' rights and interests, but Li Xin and other merchants said that "10 out of 9 appeals failed, which is almost a decoration." In their experience, they rarely feel that the platform's "protection" for merchants really takes effect.

In this "air shout" between some merchants and Pinduoduo Xiaoer, merchants emphasized that they had also been victims of "refund-only" and "malicious orders", hoping to cause the platform to re-examine the unreasonable rules felt by merchants, while Pinduoduo insisted on safeguarding the rationality of consumer rights and interests, as well as the illegitimacy of what the platform regarded as "malicious bombing of stores".

The "fires of war" escalated further in each speech.

All parties are "suffering"?

Stores of brands such as Nestle and Xu Fuji were involved in it, which became the concentrated fire attack point chosen by some merchants when retaliating against Pinduoduo's "refund only".

The reason why Nestlé and Xu Fuji were "selected" was that there were rumors in the business group that they were related to Pinduoduo's founder Huang Zheng's affiliate and operated by Pinduoduo, for this reason, a number of Nestlé and Xu Fuji stores posted authorization letters on social platforms, making statements such as "this store is not a self-operated store, and it is also deeply harmed by only refunds".

At present, Pinduoduo has activated the protection mechanism for brands and merchants that have suffered malicious impacts, and arranged special teams to dock one by one to jointly deal with malicious orders and cover the losses of merchants. Some of the brand's stores and links are back online. However, as of press time, the normal operation of many stores is still affected by the turmoil.

"Many merchants already know that they are not self-operated, but they still want to 'bomb the store', because they think that this is the only opportunity to negotiate conditions with Pinduoduo, make things bigger, and let Pinduoduo modify the rules." Li Xin believes that the merchants' starting point is good, but the way is simple and rude. "But then again, businesses wouldn't be so extreme if they had other options." He mentioned that when a merchant gave feedback to Pinduoduo Xiaoer in a group chat about an unreasonable "refund-only" order, he received a reply of "finding the reason from himself" and was directly kicked out of the group.

Wang Wei told First Finance and Economics that he was actively contacted by Pinduoduo Xiaoer when he became the head merchant of the category in a certain year, but when the sales volume or money of small merchants did not meet the standard, "the group chat said a bad word, and it was kicked for you immediately", and it was difficult to obtain effective communication channels. The vast majority of those who "attacked" Pinduoduo in this incident were small and medium-sized businesses on the platform.

Fu Jian, director of Henan Zejian Law Firm, pointed out that using e-commerce platform refund settlement rules and flashback services to maliciously refund without returning, the behavior of white goods infringes on the property rights of others, and if the amount is large, it may also constitute the crime of fraud. In his view, although the merchant claims to be trying to force the platform to rewrite the rules, this extreme approach is not advisable.

According to Article 12 of China's Anti-Unfair Competition Law, business operators using the network to engage in production and business activities must not use technical means to carry out acts that obstruct or undermine the normal operation of network products or services lawfully provided by other business operators by influencing user choices or other methods.

Fu Jian emphasized that small and medium-sized businesses that believe that the platform rules are unreasonable can negotiate with the platform, or complain and report to the market supervision and management department, and can also protect their rights through litigation if the unreasonable rules have caused economic losses. For the conflict between Pinduoduo and small businesses, a third party can also be introduced for mediation, which is helpful to handle the problem correctly.

Hong Yong, associate researcher at the Institute of E-commerce at the Research Institute of the Ministry of Commerce, said that conflicts between platforms, users and merchants often involve balancing the interests and rights of all parties. E-commerce platforms must find ways to balance consumer and merchant rights, often through effective communication, policies, and dispute resolution mechanisms.

In Hong Yong's view, it may be necessary to have a constructive dialogue between Pinduoduo and merchants and try to find a mutually beneficial solution. This may involve revisiting Pinduoduo's return and exchange policy and finding ways to address merchants' concerns while protecting consumers' rights. In addition, Pinduoduo could consider implementing better communication channels and dispute resolution mechanisms to help prevent similar conflicts in the future. In conclusion, it is important that all participants work to find solutions to the underlying problems and concerns.

The "balance point" needs to be found

As of press time, the interviewed merchants have not yet received information from Pinduoduo that they may negotiate a "refund only" policy with merchants.

Li Xin told First Finance and Economics that last year there was a new rule that was also opposed by many merchants, but it was eventually implemented by Pinduoduo. The specific rule is that if the buyer returns the goods due to the responsibility of the merchant, after the buyer gets a refund, the merchant will be fined another 3 yuan in the form of a no-threshold coupon to the buyer. In his view, this is a protection for the consumer experience, but it is too strict for many Pinduoduo merchants who are already low prices and thin profits.

Behind not "compromise" with merchants, it is also the key for Pinduoduo to break through from the sinking market and obtain a huge user scale.

In fact, in terms of concessions to consumers, to some extent, Pinduoduo and businesses stand on the same side of interests. Pinduoduo's traffic is extremely impressive in e-commerce platforms, which is almost the consensus of the interviewed merchants. Wang Wei runs stores on multiple platforms, in contrast, Pinduoduo makes the most orders every day. Li Xin said frankly that Pinduoduo can indeed make him money and is an important channel for clearing inventory.

"But in the past three or four years in Pinduoduo, my profits have also fallen more and more." Li Xin also said that the unit volume has not changed much overall, but the squeeze on profits by rules such as "refund only" makes it more difficult for him to do Pinduoduo's business. "In the past two years, various factors have actually made the living environment of merchants worse, and the profit margin of the operation itself has been relatively declining." Wang Wei said that in the new situation of more sensitive profit margins, he is also trying to shift his business focus to other platforms.

For Pinduoduo, while insisting on protecting consumers, how to better handle the relationship between platforms, consumers and merchants, and seek a balance between multi-party profits is a long-term issue.

"We and the brand have retained relevant evidence and actively resorted to the judiciary to resolutely fight these bottom-breaking behaviors to the end." The above Pinduoduo Xiaoer said. There is no doubt that maintaining the order and legitimate rights and interests of the platform is an important link to bring the incident back to reason.

But in addition, in this storm of contradictions between Pinduoduo and many merchants, Pinduoduo's efforts in identifying "malicious order" users and "maintaining the normal operation of merchants" are exactly what these small and medium-sized businesses need. The switch of opposites is not impossible. For Pinduoduo, which is constantly accelerating the construction of the platform brand store system, the test of improving the operating environment of merchants will also be on the road for a long time.