E COnOMY
Branch of the China Electronic Commerce
Association, said the lack of regulation has
allowed fraud, misleading advertising, and
dishonesty to be sadly common. It’s hard for
customers to fight for their rights if they’re
cheated, he said, whether they never see the
goods or get a low-quality delivery. The prev-
alence of fakes and poor after-sale service has
seriously affected the shopping experience
and trust of many customers.
Lin added that another big problem with
WeChat trade is the marketing and profit
models. He said that there are several tiers
of retail agents and each of them is work-
ing hard to develop their own subordinates
which makes it hard for consumers to distin-
guish it from pyramid selling.
Ming Yue told our reporter that she is of-
ten blacklisted by customers and she hates
that her business is mistaken for pyramid sell-
ing. She presented the food safety certificates
authorised by food regulators, production
licences and letters of authorisation from the
food company, saying that she would check
the company information and certificates of
quality in detail and sometimes personally
test the reliability of the goods before she de-
cided to sell.
“Pyramid selling has brought severe nega-
tive effects to WeChat commerce and I have
to prove all the time that we’re doing a decent
job,” Ming said.
“It is undeniable that some traders are en-
gaged in pyramid selling, but that’s less than
20 percent of the whole,” Lin said, adding
that many WeChat retailers develop their
down-line agents, which is a violation of the
anti-pyramid selling law.
Cheng Xusen said that advertisements put
up in the “moments” section of the app can
only be read by WeChat friends, which is in
marked contrast to dedicated e-commerce
platforms. He argued a basic rule to distin-guish WeChat commerce from pyramid
selling is that for pyramid selling, goods are
a tool to develop the down-line agents, and
profits are gained by collecting entry pay-
ments, but WeChat e-commerce merchants
gain profits simply by selling goods.Deflation
As WeChat commerce grew, researchers
and policymakers came to sniff out the bub-
ble. “During the initial phrase of WeChat
business, some store owners made great for-
tunes overnight, drawing a growing number
of traders to join,” Cheng said.
Nevertheless, he said because of the inher-
ent problems of the WeChat business mode
and tightening crackdown on illegal prac-
tices from Tencent, the parent company of
WeChat, the bubble began to burst. Many
people withdrew from the market and those
who stayed are under pressure to change.
Taobao’s mobile shopping site is a very
open system in which consumers can easily
search for the products they want. WeChat
stores, however, are a closed system, where
people can only buy from the official ac-
counts they follow. He suggested that We-
Chat shop owners cooperate with existing
e-commerce websites and brick-and-mortar
shops to carry out combined marketing cam-
paigns.
“It will be a challenge for stores to trans-
form the huge traffic of WeChat into sales
numbers but because of the huge user base
and the development of mobile commerce,
I believe WeChat business can maintain a
permanent and healthy development as long
as a reasonable framework for regulation is
unveiled,” Cheng said.
Lin Cai told our reporter that many low-
level WeChat traders didn’t strike it rich, and
they began to seek wealth dishonestly by
falsely trading or stockpiling goods. He saidA taxi driver tries to sell socks to a passenger in
Hangzhou, Zhejiang Province, May 15, 2017.
The driver’s daughter is a WeChat merchant who
has been struggling with her sales
A woman prepares goods she sold on her
WeChat shop in Qingdao, Shandong Province,
May 19, 2017
Some WeChat store owners organise a news
conference as part of a dispute with a female
hygiene products manufacturer in Beijing, June
8, 2017
Photo by VCGPhoto by VCGPhoto by dong jiexu