Albaba Faces New Assaults From Merchants, 360Buy 阿里巴巴受到中小商户和京东商城的双重夹攻

By newsdoug on October 25, 2011

Alibaba comes under new attacks Embattled Chinese e-commerce leader Alibaba is looking more and more like a fortress under attack these days, facing assaults on two fronts in the latest chapter of its ongoing spats with the rest of the online world. The first and more serious of those spats has seen smaller online merchants, upset over huge fee hikes at Taobao Mall, Alibaba’s main B2C site, launch an assault on Alibaba’s Alipay electronic payments site, according to domestic media reports. (English article; Chinese article) The reports are quite colorful, with enraged small- and medium-sized merchants, who have complained the fee hikes are designed to weed them out, withdrawing massive amounts of money from Alipay one day late last week, and then blocking access to the service completely. This mass movement comes after the same group of merchants wreaked havoc on Taobao Mall itself a couple of weeks ago by making mass bogus purchases from large merchants on the site, only to cancel their transactions hours later. (previous post) Beijing has reportedly stepped in to try to mediate the dispute and Alibaba itself has made some conciliatory gestures, but obviously the merchants aren’t happy with progress so far and the damage to Taobao Mall looks set to drag on for at least a couple of months, if not longer. In the second development, media are reporting that 360Buy, one of China’s largest e-commerce sites, is hinting it may soon block its pages from searches on Etao, Alibaba’s site that specializes in e-commerce related searches. (Chinese article) Such a break would be a major blow to Etao, and would follow 360Buy’s cut off of ties with Alipay back in August, reflecting a broader feud. (previous post) Many in the online world already blame Alibaba founder Jack Ma for the negative overseas sentiment towards China Internet stocks due to his high profile dispute with Yahoo (Nasdaq: YHOO) earlier this year over ownership of Alipay. These latest disputes will hardly help his company’s damaged reputation, and could mark the latest chapter in a longer decline for the company.

Bottom line: Alibaba’s latest disputes with smaller merchants on its Taobao platform and e-commerce giant 360Buy mark the latest chapter in what could become a long-term decline for the firm.

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