Alibaba’s Tmall waives annual service fee, while Taobao relaxes ‘refund only’ policy

Chinese e-commerce giant Alibaba Group Holding is waiving the annual service fee for merchants on Tmall and loosening its “refund only” policy to reward sellers with good track record on Taobao.

Tmall, home to mainly established brands and sellers, from September 1 will waive its annual software service fee that used to range from 30,000 yuan (US$4,145) to 60,000 yuan for merchants in various categories, Alibaba’s main e-commerce unit Taobao and Tmall Group (TTG) announced on Friday. Alibaba owns the South China Morning Post.

Existing Tmall sellers that paid the service fee in advance will receive a refund, while new merchants joining the platform after September will be exempt.

In a separate announcement, Taobao said that its refund-only policy will be optimized to provide merchants with good track record on the marketplace more autonomy in handling refund requests from customers.

For merchants with an experience rating of 4.8 and above, Taobao said it will not intervene proactively to support consumers’ requests for refunds. Instead, it will encourage the buyer and seller to negotiate, according to the TTG statement. For stores with lower ratings, Taobao said it will give them autonomy in varying degrees.

Taobao and Chinese rival JD.com offered the refund-only policy in December, following an option that budget online retailer Pinduoduo has had in place since 2021. The policy allows shoppers to receive a refund for a product they are unhappy with, without having to return it. This arrangement has since sparked concern among some sellers about potential abuse of the terms.

While that policy has safeguarded consumer rights, it has also been exploited by some freebie seekers who have “harmed the legitimate rights of businesses”, TGG said.

Taobao’s latest move aims “to create a more positive and healthy e-commerce ecosystem by ensuring consumer rights and improving business environment at the same time”, TTG said.

These initiatives by TTG reflect the group’s efforts to boost support for merchants amid increased competition from main domestic rival JD.com and the challenge from younger platforms such as PDD Holdings’ Pinduoduo and ByteDance-owned Douyin.

Earlier this year, TTG introduced artificial intelligence tools and functions for merchants to help improve services and attract new customers.