The Chinese regulator has published draft guidelines for fees that online platforms charge third-party merchants, an important source of revenue for companies including JD.com, Meituan and PDD Holdings.
Companies that operate online platforms should charge reasonable fees and take into account factors such as the operational status of merchants with which they do businesses, the State Administration for Market Regulation, the country’s anti-monopoly regulator, said in a statement on Sunday (May 25).
The regulator said the deadline for feedback on the draft guidance is Jun 3.
This is the latest in a series of steps by Beijing to support local merchants that are under pressure from a sluggish local economy and a trade war with the US, and also have to deal with online platforms’ long-time customer-first approach.
The platforms should set flexible pricing strategies for charges including commission, membership and service fees to reduce merchants’ burdens, and they should offer better support to smaller businesses, according to the statement.
The guidance was issued after complaints from merchants about issues including “complicated and non-transparent” charges on the platforms, the regulator said. It is intended to help platform companies improve fee-related compliance frameworks and encourage the healthy development of the industry, according to the statement.
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Beijing has been increasing efforts to rein in online platforms’ consumer-first practices, which merchants say affect margins.
Late last year, the regulator and the Ministry of Commerce told PDD Holdings executives that its policy which allows shoppers to claim refunds without returning purchased goods placed an unfair burden on small merchants, people familiar with the matter said.
Chinese merchants are also facing further pressure from the US’ cancellation of a loophole that exempted smaller packages shipped to America from tariffs. De minimis – which loosely translates as “too small to matter” – merchandise was allowed to be shipped directly to US consumers from abroad, usually bypassing warehouses and distribution hubs.
The US introduced tariffs on these shipments from May 2. BLOOMBERG
