China’s e-commerce market may be gigantic and hugely profitable, but it’s also still a little bit like the wild west, as regulators are still trying to figure out the best way to oversee the industry without smothering its growth. That means that even at respectable sites, things sometimes go awry, and that’s exactly what happened at 360Buy recently according to the IT Times, which has the story of a 360Buy employee who extorted thousands of dollars and valuable goods out of merchants with the promise of helping them build traffic.
One merchant, a clothing manufacturer, told the IT times that his relationship with the 360Buy operations manager — whose job it was to liase with merchants, discuss activities and promotions, etc. — started out well enough, with the merchant providing the 360Buy manager with free clothing in return for being promoted on the site. This was meant as a friendly gesture, the merchant says, and it wasn’t something the 360Buy manager demanded; the merchant just wanted to give back in thanks for the promotion his site was getting.
But slowly, the 360Buy manager started asking that the clothing company buy him items — expensive items. Plane tickets, laptops, and phones were all on the menu, but the manager was careful enough never to ask directly for the items, rather referring to it as “borrowing” or “purchasing it on behalf of [the manager].” When he received money, it was almost always via friends’ accounts. Still, he never paid back the money spent or returned the items, even when the clothing manufacturer coughed up 30,000 RMB ($4,615), ostensibly to help the 360Buy manager’s friend purchase a house.
Last October, the clothing supplier decided it had finally had enough, and stopped fulfilling the 360buy manager’s demands. Almost immediately, things went south. The company’s traffic dropped, all kinds of problems arose, and payments from 360Buy for purchased items came through slowly, or not at all. The 360Buy manager had an excuse — ‘the purchased items have unresolved complaints filed’ — but that had never caused a delay in payment before the clothing supplier stopped giving him what he wanted.
According to a former 360Buy operations manager in the same position who spoke with the IT Times on the condition of anonymity, an operations manager may have 50 to 100 merchants under their jurisdiction at any given time and they have quite a bit of leeway in terms of who they can give allotted resources like access to the highest profile events and promotions. And the abuse of that power is apparently not uncommon.
It’s a problem that 360Buy and other similar e-commerce sites are aware of, but may have some difficulty combatting. The IT Times report claims that 360Buy CEO Liu Qiangdong addressed the problems in an internal meeting and suggested he was not satisfied with some team members attitudes. Publicly, the company has already responded to the IT Times report with a fairly boilerplate statement about how it is increasing internal controls to eliminate corruption and how it also welcomes oversight from consumers.
But how effectively 360Buy will actually be in combatting internal corruption remains to be seen. More merchants willing to blow the whistle would be an excellent start, but ultimately it seems like this is something Liu Qiangdong and his team will have to address at a more fundamental level.
(IT Times via Sina Tech)
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