Alibaba Is Planning To Change Consumer Habit By Hiding The Transaction Record From Consumers

摘要: In this article, the author analyzes the possible impacts of Taobao’s recent move and points out three challenges it has to face on the way ahead.

(Chinese Version)

Editor’s Note:
Starting from January 27th, consumers will no longer be able to see the buyers and the basic information of what they have bought in the monthly transaction page. Yet, they can still see the monthly transaction volume.

Finally, Alibaba makes up its mind to hide the transaction record

After Taobao Summit revealed that Alibaba was going to hide transaction record from online shoppers, heated discussions ensued among some of the active owners of Taobao shops. Some applauded for Alibaba’s courage, believing that new shops, small and middle-sized shops are going to benefit a lot from such policy, others, however, were afraid that such policy would, on the contrary, encourage behaviors such as faking orders. Fundamentally, this discussion is centered around fake orders, one of the two headaches of Taobao and Tmall.

Will hiding transaction record on Taobao help terminate behaviors fake orders?

Owners of Taobao shops, the public and all kinds of media organizations all have their own understandings on this topic. To really understand the possible impact of this new policy, we’ve got to make it clear the merits and demerits of the policy.

On the one hand, transaction record is a crucial indicator for most online shoppers after Taobao automatically ranked provided by different shops on Taobao based on price, reputation and sales. Thus, many owners of Taobao shops would make place orders to cheat consumers into believing that their products are more welcome, and thus trustworthy. In this case, if Alibaba chooses to hide transaction records from online shoppers, then shop owners no longer have to do these things at all. As is known to all, placing fake orders for each other have become a common practice for owners of new shops on Taobao. So this policy might make the game fairer for them.

On the other hand, the privacy of Taobao shop owners will be better proected. In the past, many shop owners on Taobao would remove products and then put them back with no transaction record, fearing the transaction record would have negative impacts on consumers. In addition, such policy will make it impossible for rivals to compete with each other by placing more fake orders only to surpass others.

I do admit such policy might have the above positive impacts. However, sales figure isn’t the only thing that will affect consumers’ decisions. Other factors, such as buyers’ comments, are equally important. When shop owners no longer need to place fake orders, they have to make fake comments. It is well known that many shop owners on Taobao would do everything they could to please consumers who place negative comments. In a sense, consumers’ comments have become more important than the quality of products. Since it is unlikely that Alibaba will hide consumers’ comments in the short time, the impact of this new policy will be very limited.

Alibaba does have some algorithms and mechanisms to tell if a shop owner have made fake orders, and use punishment accordingly. We can also tell from this recent move that it is determined to put an end to such behaviors.

The real intent of Alibaba is to change consumer habit

Near the end of 2014, Tmall tested the water by hiding the sales figure of Apple and ZARA’s shops on Tmall to crack down behaviors such as placing fake orders. However, JD has hidden sales figure from consumers long time ago, yet such behavior persists. There are so many factors, including the brief introduction, detailed description, sales, comments, transaction records, ratings, that will impact consumer habit, which leaves too much room for shop owners to play tricks.

According to China Online Retailing’s report of the Chinese B2C market, Tmall grabbed 54% share of the market, JD ranked the second and accounted for another 23.2%. Yet, Kantar Retail’s statistics suggest that JD has already outperformed Tmall. As a matter of fact, the discussion over whether JD or Tmall’s B2C model is a more appropriate one.

At the same time, other B2C models, such as online retailers of specific sectors, cross-border online retailers, have also emerged. Taobao, haunted by problems such as fake products and fake orders, seems to be going downhill. So it is high time Alibaba made some change and change consumer habit a little bit.

After hiding the return rate long time ago, Taobao seems to be going to hide transaction record from users now, and even more figures in the near future. Ideally, Taobao’s users should be able to search whatever products they want and tell which product to buy in a short time. To change consumer habit fundamentally, Taobao has to first address following three problems:

Above all, it has to find a better way to rank users’ search result. If Taobao continues to rank products based on sales, transaction volume, behaviors such as placing fake orders will never be put to an end. Only when Taobao manages to develop an appropriate ranking algorithm, whether based on bid data, or cloud computing technologies, can it win its users’ trust.

Moreover, Taobao has to figure out a way to regulate Taobao shop owners’ ads and introduction to their products. It is commonly known that no shop owner will admit that their products are fake, even then they are sold at an amazingly low price.

Last but not least, it is high time Taobao improved its regulation system and stopped show a blind eye for some obviously illegitimate behaviors. Interestingly, on the one hand, Taobao is doing everything it could to crack down on behaviors such as placing fake orders; on the other hand, there are thousands of tools within Taobao to encourage shop owners to compete and launch price wars.

In conclusion, there is a fair reason why Taobao and Tmall plans to hide transaction records from users, otherwise, they will ultimately repeat the same mistakes of retailing platforms that adopt the traditional C2C model.

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[The article is published and edited with authorization from the author @Alter, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.

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