It looked like a banner year for doing business in China. The US clothing company expected a 20 percent jump in online sales on Alibaba's Tmall due to the huge reach of the e-commerce giant.
But executives soon learned that Alibaba can take away whatever they can
declined to sign an exclusive contract with Alibaba, and instead took part in a major sales campaign with arch-rival JD.com. Tmall punished her by taking steps to cut traffic to her storefront, two senior executives told The Associated Press.
They said banners disappeared from prominent spots in Tmall sales showrooms, the company was blocked by special sales and products in main search no longer appeared results
The well-known American brand saw their Tmall sales as 1
"Based on our sales record, we should have been in a prominent position, but we were at the bottom of the page," said the brand's e-commerce director, who spoke for fear of further retaliation on the condition of anonymity , That's a clear punishment.
While the Trump government urges China to gamble on fair trade rules, companies are moving into a calmer, but no less important, struggle for rules-based access to $ 610 billion (19659003) executives from five major consumer brands the AP that, after refusing to enter into exclusive partnerships with Alibaba, traffic to their Tmall store fronts fell and had a negative impact on sales, three of which are American companies with annual sales of billions, which are dependent on growth. Alibaba Group denied that the prosecution of exclusive business is a common practice and the charge of coercion is called "completely false."
"Alibaba and Tmall conduct business in full compliance.
with the Chinese laws, "said Alibaba." How many e-commerce Pl attformen we have exclusive partnerships with some of Tmall's dealers. The dealer chooses such an arrangement because of the attractive services and value that Tmall brings them. "
Executives only spoke to the AP on condition of anonymity for fear of reprisal, but their concerns were raised by a US
Speaking about cyberspace last week, Chinese President Xi Jinping said ensuring free and fair online competition is a regulatory priority and pulls the need down "Establishing a fair market environment, strengthening intellectual property protection and countering monopoly and unfair competition," state media reported.
In its months-long investigation, the AP interviewed more than 30 people and reviewed two Alibaba contracts the previously unpublished exclusivity clauses The AP found that the platforms that control online access to Chinese consumers have such enormous power that even multibillion-dollar foreign companies struggle to defend themselves.
"We urge the authorities to quickly identify and take action" Stephen Lamar, executive vice president of the American Apparel & Footwear Association, added that members of his industry group had complained about Alibaba's unfair competition practices.
JD.com is a member and sponsor of the Trading Group
Imagine a company twice as profitable as Amazon, serving more people every year than across North America. That's Alibaba. It claims to be in the sales market for nearly $ 550 billion a year – more than anything sold online across the US economy.
Attempts by affected companies provide a rare window into a bleeding business culture that could spread in China as Alibaba applies its aggressive, innovative and highly profitable ecommerce model globally. As their products are manufactured in the United States – and some of them – as a result of the tight sales figures in China's critical growth market, China-US trade imbalances may deepen, which is a major problem for the Trump administration. 19659003] The competition between Alibaba and JD.com is so infamous in China – and so filthy – it's called "a big cat-and-dog war," according to Tmall's mascot and the white dog of JD.com.
Wang Hongbo, a consultant who helps Chinese brands sell overseas online, reiterated the concerns of the companies that spoke to AP.
"Many brands complained about it and because they did not behave, they saw restrictions on Tmall," he said.
JD.com said over 100 Chinese brands defected last year due to pressure from its main rival, a claim that Alibaba and some brands have contested. The exodus seems to have had a lasting effect.
"Based on the feedback we received from these dealers, the move was mainly due to the compulsion tactics of our competitors, which, if proven true, would be illegal and unequivocal against the dealers." "Sidney Huang, CFO of JD.com, said in a conference call in November.
Peebird, a Chinese fashion company, is one of those who left JD.com last year, but Weng Jianghong, managing director of e-commerce Company, said Alibaba did not force them and the decision to focus on Tmall is strategic.
"We will centralize and develop the limited resources of our company on Tmall," he said
Many companies, including JD.com claims exclusive deals, but JD.com claims that it does not strategically drive dealers to exclusivity.
"We support fair and open competition because greater choice for brands and users is always better," said JD.com in a statement, "We gain customers through a first-class shopping experience, rather than limiting the possibilities of brands or consumers."
JD.com always tries noc h to get the brands back. "We believe there will be more traders coming back," Huang told analysts last month. "But I do not expect a very quick fix."