Chinese Government Tightens Online Shopping Regulations

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china online

One of the biggest complaints among consumers when dealing with Tmall, Taobao and other C2C online platforms are the number of counterfeit merchants the consumer market is having to deal with. With customer to customer e-commerce sites, consumers utilize reviews written on the seller to determine if they want to do business with them. However, with the new phenomenon being seen with these sites, more and more vendors are writing fake reviews and posting these to their account in hopes of attracting more consumers. Unfortunately, consumers do fall for these fake reviews and are often disappointed with the service and product they receive.

This issue has been termed “brushing”. It works like:

burshing orders

It is a system that is hard for e-commerce vendors to spot, as the brushers often write reviews which are well written, believable, and what a person would expect to see a satisfied customer state. When it comes to brushing, most people immediately think of Alibaba e-commerce sites, which did come under fire by Chinese government officials for all the brushing and fake vendors being allowed to dominate the online site.

A study that was led by Wang and Xu Haitao from the College of William and Mary found these online retailers are being forced to brush their reviews in an effort to dominate the market. It was found that for those who have bushed reviews that talk up their company and product, they will sell products 10 times faster than other companies.

Of all the fake transactions taking place, Taobao only caught 2.2% in a 2 month period

The epidemic of fake transactions or “brushing” was evident in 2014, as Alibaba released official statistics of just how many fake transactions had taken place during 2013. In 2013, Taobao had 500 million transactions that were faked that added up to 10 billion yuan for the entire  year. This is out of 1.2 million sellers present on Taobao during 2013.

With statistics like these, the government has stepped in. The goal of the Chinese government is to make the e-commerce world one that is fair and where these fake reviews are no longer enticing consumers with untruths. The Chinese government wants these e-commerce platforms to punish these sellers by not allowing them on the platform any longer. In addition, for every seller that the e-commerce platform does not punish, the company could be fined up to 500,000 yuana for every seller they fail to report as misbehaving.

Though Alibaba is often the first company thought of when it comes to fake reviews. However, recent news reports show that Amazon is getting hit just as hard as Alibaba with these fake reviews. Amazon has already filed a lawsuit in the United States against a company they believe is responsible for selling fake reviews to businesses who are in need of these and want to ensure their store is seen by more consumers.

The issue that China is facing with their fake reviews is how the companies are shipping out “products”. Thus, the sale does look legitimately. However, in most cases, the box shipped is empty of any product.

Professional who have been following these new laws and the brushing epidemic have given opinions on what can be done to prevent this practice. They propose that e-commerce sites be encouraged to look for those who abuse the system and dismiss these abusers, while also looking for users who are actively brushing to get their business higher in the rankings. Often times, the brushing activity is evident by several shipments and reviews that are in the same time frame. Reviews are often very generic and positive, and are almost too good to be true.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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