Caixin
Apr 09, 2021 07:35 PM
BUSINESS & TECH

Douyin Cracks Down on Rule-Breaking Vendors to Try to Restore Trust

What’s new: TikTok’s equivalent in China, Douyin, is set to crack down on e-commerce vendors that contravene its regulations, as it fears repeat rule-breakers will undermine customer trust and lead the platform losing market share to domestic rival Kuaishou.

“We wouldn’t mind seeing the gross merchandise value (GMV) of items sold on the platform decrease,” Kang Zeyu, the head of Douyin’s e-commerce unit said at a Guangzhou e-commerce ecology summit Thursday, “but we have to step up regulation on retailers and their services through our platform.”

The remarks come as the fledging online vendor and live-streaming e-commerce business on Douyin has come under fire for several reoccurring problems, including vendors faking their sale numbers, fudging merchants’ rating scores and selling counterfeit products.

More background: Launched nearly one year ago, Douyin claims its e-commerce business has grown over 12 times in terms of GMV from January to December in 2020. But it still faces intensifying competition from Kuaishou, which claimed a GMV of 381.2 billion yuan ($58.2 billion) last year, combining sales on its own app and those redirected to third-party online marketplaces, up seven times from that in 2019.

The GMV of products sold via Douyin is believed to have been approximately 170 billion yuan to 180 billion yuan last year, according to several merchants and Douyin institutional partners Caixin spoke to. That figure is expected to reach 300 billion yuan this year. But its parent company ByteDance has denied the figures.

Kang also said at the Thursday summit that Douyin is using its proprietary algorithms to boost e-commerce business, as they can gather data about users’ interests and push targeted advertisements accordingly, “it’s just like street shopping when people do not always know what they desire at first.”

As of the end of 2020, Douyin had detected and “taken care of” 438,800 short videos and 14,400 livestreaming sessions featuring e-commerce content that had violated the platform’s policies, the company said, and 9,384 vendors were removed for selling fake merchandises.

Contact reporter Anniek Bao (yunxinbao@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)

Support quality journalism in China. Subscribe to Caixin Global starting at $0.99.

Follow the Chinese markets in real time with Caixin Global’s new stock database.

You've accessed an article available only to subscribers
VIEW OPTIONS
Share this article
Open WeChat and scan the QR code