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How to stay honest (or not) as an e-commerce merchant in China

Written by Simin Zhang Published on     4 mins read

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China’s e-commerce sector is more cutthroat than ever. To stay afloat, online stores use fake orders, fake reviews, and even fake shipments to boost their online presence.

Every year, during China’s two biggest e-commerce shopping sprees—Singles’ Day in November and the mid-year 618 festival—major online marketplaces report record transaction volumes and top-ranking brands boast staggering sales numbers. Yet, there are always observers who question the credibility of these statistics.

The reason is that China’s online retail sector is rife with inflated sales numbers and fake reviews. “Brushing,” as the process is called, has been prevalent for more than a decade.

The aim of brushing is to elevate a store or product’s standing in search rankings and attract clicks for listings. One common way to achieve this is for merchants to recruit their friends, relatives, and even professional “brushers” to place orders, which are followed by fake order dispatches or empty parcels. When the transaction is completed, the brushers then write glowing reviews for the product and seller.

“For online vendors, brushing is no longer a questionable business practice, but rather an essential tactic in an increasingly tough business environment,” said a Taobao merchant by the name of Mr. Hu.

Hu has been selling men’s clothing on Taobao for ten years and told KrASIA that most merchants he knows have faked internet traffic at some point in time.

“Before 2013, if you listed a product on Taobao, you could expect your first sale within days. But nowadays, if you launch a product and don’t do anything about it, chances are it won’t sell for at least two months,” he said. It has become a common practice for first-time online store operators to invite people they know to place at least ten orders and give the business a head start.

Estimations suggest there are more than 12 million sellers on Taobao. For certain categories such as cell phone chargers and cases, where a vendor vies for eyeballs alongside tens of thousands of competitors selling the same or similar items, merchants undercut each other, eroding their own profits. A quick search on Taobao shows iPhone cases can be bought for a mere 3.50 yuan, or around half a dollar, for example.

To keep up with the competition, it is essential for vendors to maximize their exposure. A product’s ranking on e-commerce sites is based on a full range of factors, including sales volume, popularity, reviews, and detailed seller ratings. Because sales volume matters the most, this is usually where brushed orders come into play.

The cost of brushing runs in the band of RMB 5–10, or USD 0.77–1.55, per transaction. Compared with the commonly used pay-per-click and pay-per-sale advertising tools provided by Taobao, where one click could cost up to RMB 30 (USD 4.60), brushing is far cheaper. Social or content strategies can be effective but involve complicated planning that small-scale merchants may not be able to commit to.

Read this: Dark patterns are rife in Southeast Asia’s e-commerce marketplaces

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E-commerce giants tried to curtail brushing when it took off in 2010. The Chinese government made it illegal for online merchants to post fake reviews for their own products. Then, China’s state broadcaster took aim at the problem during its annual Consumer Rights Day in 2016, and online marketplace operators began to crack down on the practice more seriously.

Both Alibaba and JD.com have developed sophisticated algorithms that can identify anomalies in transaction patterns, logistics, and IP addresses to detect brushing. On Taobao, merchants caught brushing could face penalties like having transaction records and reviews deleted, losing the right to appear in search results for 30 days, or even the permanent closure of their stores, which can be a devastating blow for any vendor.

Alibaba has cooperated with law enforcement and filed numerous lawsuits against offenders and brushing companies, but the practice persists. Brushers are continuously adapting to the algorithm and refining their skills to stay under the radar, such as by imitating the behavior of real buyers—staying on the product page for 3–5 minutes, sending queries to the merchant, browsing a few stores, and saving items as “favorites” before placing their orders. Experienced vendors have learned to set the ratio between the number of purchases and total traffic clicks in a reasonable range to avoid suspicion.

A TV retailer on Taobao, who spoke on condition of anonymity, took part in this year’s 618 mega sale, and told KrASIA that many of his competitors resorted to the time-honored practice of faking orders in the lead-up to the festival. In the last hour of the 618 shopping event, he observed, sales of several leading TV brands spiked dramatically, exceeding the total volume in the first hour of the day, which is an unusual development. He admits that fake transactions represented about one-third of total sales in his store on that day.

On online forums, vendors registered with JD.com say that during online shopping festivals, they have been approached by the site’s operation team, which asked them to “do their best” to rack up sales so the marketplace can hit new highs in transaction volume. This, the vendors suggest, is when marketplaces turn a blind eye to brushing.

Analysts say that while livestreaming e-commerce platforms such as Kuaishou and Douyin emerge as formidable forces in China’s crowded and cutthroat e-commerce market, established players such as JD.com and Alibaba cannot afford to lose their business to attention-hogging competitors. That may explain why it will be difficult to eradicate the practice of brushing at its root.

Although brushing likely won’t fade away any time soon, some online merchants are figuring out ways to build their long-term success. An owner of an electric toothbrushes brand, Mr. Zeng, told KrASIA that he had never utilized brushing techniques on e-commerce platforms. Confident in his product, Zeng poured resources into social media marketing and original content. He now maintains regular customers.

“You shouldn’t rely too much on the platforms and ‘play by the rules’ like everyone else. It would only narrow your ways,” he said.

 Read this: Data from complaints site illustrates the traps and tricks deployed for online shopping festivals

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