2025, e-commerce ushered in a "new balance"

2024 is a challenging year for e-commerce merchants. Issues such as refunds and shipping insurance alone have made many merchants miserable. However, as major e-commerce platforms have adjusted their policies, the situation has improved. This article will explore how these changes affect the e-commerce ecosystem and how merchants and users can find a new balance under the new rules.

The Chinese New Year is coming, and e-commerce merchant Wu Tianling is busy trying to stock up on enough inventory for the Chinese New Year. In his opinion, the past 2024 can finally "breathe a sigh of relief."

"We were having a hard time in the first half of last year. Many people knew that the refund policy was a good idea, but most people couldn't imagine how excessive those who only offered refunds were. Not to mention those who deliberately cheated people out of money, some even told the customer service directly, 'I'll give you a pack of cigarettes and I won't deal with your store.' Isn't this directly extortion?" Wu Tianling recalled the situation in the first half of last year, which was almost precarious and dangerous.

In the second half of the year, Taobao was the first to relax the refund-only policy, followed by JD.com, Douyin, and Pinduoduo. As more people paid attention to the refund-only policy and freight insurance, e-commerce platforms successively issued measures, and the situation gradually eased. By Double 11, many merchants lamented that the situation had improved significantly. "Fortunately, we made it to Double 11. Although there are still some cases of this kind of wool-pulling, it is much better than before."

However, when talking about his expectations for 2025, Wu Tianling also admitted that he still hopes that the platform can make further improvements to the remaining situations of wool-pulling.

Entering into 2025, Taobao and Tmall have announced 12 measures to benefit merchants. By improving the abnormal "refund only" handling mechanism, returning the promotion fees for abnormal orders, and creating the first account integrity system, etc., the measures aim to protect the rights and interests of merchants and govern "freeloaders".

In the era of inventory, the survivors are the kings. Players who survived the difficult year of 2024 for e-commerce merchants are all "winners". In 2025, after the platform has adjusted the balance between merchants and users, will e-commerce be better?

1. 2024 starts low and ends high

As Laozi said, "He who is content is rich; he who is forceful has ambition." For those businesses that once relied on the rapid development of e-commerce to take advantage of the situation, they know it is too difficult to continue their rapid growth and maintain their past glory in the difficult e-commerce world in the past few years.

Like Wu Tianling, Jin Hanyu recalled that the business experience in the first half of 2024 was still a lingering "nightmare". His women's clothing online store experienced a wave of refunds.

According to his description, "the store's refund rate is often 70% or even 80%, and refunds alone sometimes account for half of it." Throughout the first half of the year, if it were not for the deposits, his women's clothing store would have closed down long ago.

Image source: Xiaohongshu

"Even if it's not just a refund, the shipping insurance for return refund is enough to make you suffer." Every time a customer asks for a return and applies for shipping insurance compensation, he feels helpless and frustrated.

The difficulties these merchants encounter are just a microcosm of the majority of merchants. Platform rules such as "refund only" and "shipping insurance" are exploited by a large number of wool-pulling parties. Some people even pull dozens or hundreds of communities and open courses to form a "wool-pulling industry chain."

In September 2024, the People's Court of Huyi District, Xi'an City, heard a case caused by a user's "refund only, no return" after online shopping. Zheng Yu (pseudonym) bought a water pump on an online shopping platform and requested a refund on the grounds of "model mismatch" and the platform successfully accepted it. The merchant Wang asked Zheng Yu to return the water pump many times but received no response, so he sued him in court in anger.

One of the court's considerations on this incident was: From a moral perspective, the "refund only without return" approach not only undermines the principle of honest and trustworthy transactions, but also has a negative impact on the business network environment.

Not only that, incidents such as "a washing machine worth 1,400 yuan was asked to be refunded because it could not be installed", "clothes worth 11 yuan were purchased online, and the merchant had to compensate 800 yuan after only refunding", and "20,000 merchants jointly boycotted refunds without reason" occurred frequently.

This situation continued until June 18, 2024.

The "coldest 618 in history" is here. Not only is the flat sales volume making e-commerce merchants and platforms feel the most real desolation, but also the continuous "refund only" and high proportion of return refunds during the promotion period, which caused damage to goods, makes merchants feel unbearable. The continuous "peaceful" imbalance between users and merchants is accompanied by the involution and deformity of the overall e-commerce ecosystem.

The change occurred in July, when Taobao and Tmall were the first in the industry to relax the "refund only" policy. For merchants with good service and a store experience score of ≥4.8, Taobao gave them the right to independently handle returns and refunds. The better the merchant's service quality, the more likely it is that the merchant will not need to "refund only". For high-priced refunds like "a 1,400 yuan washing machine was refunded only", Taobao also proposed a solution of manual review by customer service.

After Taobao took the lead, JD.com, Douyin, and Pinduoduo finally followed suit. Some of them relaxed the refund-only policy, while others "abolished" the original policy. The policy of refunding only freight insurance has been added, which has continuously turned to the trend of pleasing users and turning to the path of optimizing the business environment by reasonably balancing the service and quality of both buyers and sellers.

Jin Hanyu feels that "starting around September, the pressure on the store to issue refunds has gradually become less severe."

Those who have similar feelings include Zixu, a boss born in 1998 who has experienced ups and downs from annual sales of over 100 million to debts of one million. He has witnessed the era of explosive growth in e-commerce dividends and had the highlight of earning one million a month. However, his experience from 2023 to the first half of 2024 has taught him the business code of the inventory era.

"This year has been really tough. The return rate and product rejection rate of our custom shark pants were alarmingly high due to fabric issues. The promotion fees were like a bottomless pit, and I kept throwing money into it, resulting in losses of over a million. The pressure was so great that I couldn't sleep all night."

During this year's Double 11, Zixu sacrificed some of his profits to improve his store's overall ranking and the number of new customers. Instead of competing on price, he used the "roll service" method, and his store's Taobao experience score rose from 4.4 to 4.8, and the store traffic increased by 200%, achieving a curve overtaking.

By triggering large-scale traffic through experience sharing and reducing operating costs, this has attracted a lot of attention in Zixu's business circle. "Many colleagues have come to me for advice, and I have met some new friends."

2. From 40 to 70 points, merchants want more "benefits"

Although e-commerce platforms are working hard to improve the business environment for merchants, many merchants feel that there are still some areas that need to be optimized.

In the first half of last year, Xiao Ye, the manager of a men's clothing brand, found that the store's return cost rose from the initial 0.9 yuan per order to a maximum of 4.4 yuan per order. "It's impossible not to buy freight insurance. The sales minus the freight cost can't cover it."

However, as Taobao launched the return policy for freight insurance in the second half of the year, Xiaoye also joined the "testing army". "My return cost dropped from 4.4 yuan to 3.4 yuan per order, saving almost a quarter of the freight cost."

It is true that things have improved. That is why he has more expectations for 2025. After all, compared with 0.9 yuan per order, 3.4 yuan per order is still a heavy burden. In his opinion, "If I were to give a score, I feel it has gone from 40 points to 70 points, but it should be better."

Image source: Xiaohongshu

Li Weisong said that the shipping insurance of a few dollars is "a drop in the ocean" compared to the losses from returns that his e-commerce business often encounters. He provides customized tile services on the platform, and usually ships the tiles after the model is determined. Some customers do not like the tiles after receiving them, but they can easily return them under the return policy in the first half of last year, and the platform generally determines that it is the merchant's problem and determines that they should bear the shipping costs.

In his experience, "the total payment was only 2,900 yuan, and the shipping fee for the return was 3,600 yuan. It would be better to just give it to the customer directly." Li Weisong hopes that in the new year, the refund and return measures for some extreme customers can be more "harsh".

For Zhuang Mei, who entered the e-commerce industry in the second half of the year, she is in an industry with a low return rate. After joining the "Return Treasure", the cost has been reduced by about 2 yuan per order. Although she has not experienced the "darkest moment" in the first half of the year, she also feels that there is still a lot of room for improvement in the current business environment of e-commerce platforms.

"Sometimes I know it's an abnormal order, but I still have to ship it. If I don't, I will be deducted money, and I'm afraid of making a mistake and offending the customer." She once lost hundreds of yuan on a single order because of the wrong price. When she contacted the user, the other party pretended to be dead and ignored her.

Last August, the "Little Swan Dongshan Store" issued an announcement that due to the new operator's lack of understanding of the platform's activity rules, the store's washing machine products were sold at prices far below the market price. Within 20 minutes of discovering the problem, nearly 40,000 orders were placed, involving an amount of nearly 40 million yuan, with a value of more than 70 million yuan, and direct economic losses of more than 30 million yuan. What's more, some consumers placed orders four or five times and then sought to resell them, further exacerbating the losses. Many times, stores cannot afford it, and remedial measures are also a drop in the bucket, so they can only choose to close the store sadly.

3. In 2025, the platform will find a new balance for users and merchants

In recent years, all parties involved in e-commerce generally feel that the input-output ratio is not as good as before. On the surface, the contradiction is mainly concentrated between users and merchants. From the perspective of merchants, the emergence of refunds alone seems to satisfy consumers' demands for "bullying others with power". From the perspective of users, the complicated preferential exemption and return process seems to be an obstacle deliberately set up by merchants.

However, from the perspective of the operating mechanism of industry integration, the root cause of the industry's difficulties is neither unreasonable users nor merchants who are in a more difficult situation but are unwilling to give up profits, but rather the deterioration of e-commerce operating rules and ecological logic under the changes in the overall economic environment.

Source: Interim Provisions on Anti-Unfair Competition on the Internet

The e-commerce ecosystem is continuing to change, and the relationship between platforms, merchants and users is also seeking a new balance.

When talking with many merchants, the general feeling of the merchants was, "If it is really a problem with the store, we have no problem taking responsibility, but the platform rules used to favor users without limit, and some nitpicking and malicious users were indulged, which is what is really uncomfortable."

In addition to improving the abnormal "refund only" handling mechanism and increasing the efforts to intercept abnormal behaviors, for the platform, giving merchants more autonomy is also an important part of improving the overall e-commerce ecosystem and finding a balance between buyers and sellers again.

Among them, Taobao has set up an experience score threshold system. For merchants whose store comprehensive experience score is greater than or equal to 4.8 points, the platform will no longer actively intervene to support consumers to only refund after receiving the goods, and adjust it to let the merchants negotiate with consumers first. Starting in June last year, Taobao Tmall used the PXI (Product Experience Index) indicator to completely replace the DSR (Store Rating Index) as an indicator that affects search weight. In the past, the store score was directly linked to GMV, but now various indicators for merchants to serve consumers have been added, such as logistics timeliness, praise rate, return and refund rate, etc.

Subsequently, JD.com also chose to follow suit, replacing "store star rating" with "comprehensive experience score", and Pinduoduo and Douyin also followed suit.

In 2025, Taobao and Tmall will increase their investment again, and in the pilot program of "Return Treasure", merchants can choose to provide return shipping services for some users. At the same time, "Return Treasure" will be untied from the promotion, and merchants can choose whether to use the "Return Treasure" product during the platform promotion. In this way, merchants will have more diverse choices.

On the user side, the platforms do not seem to be in a hurry to reduce the various services that have made users happy for a long time, and they appear to be more cautious in adjusting user rules.

However, being cautious does not mean not doing it. The rules of some e-commerce platforms have begun to differentiate between different types of users, and the platform rules have also been formulated in more detail.

What has particularly attracted the attention of the industry is that in this centralized announcement, Taobao and Tmall announced that they will establish the first user account integrity system in the e-commerce industry. Specifically, for abnormal refunds, return substitutions, false returns, online pictures/Photoshopped pictures, etc., merchants on the platform can enter users into the account integrity system through complaint feedback, and the platform will reject after-sales service, single store or platform purchase restrictions, etc. depending on the situation. As for professional wool party, Taobao and Tmall will also cooperate with relevant departments to transfer them to judicial authorities.

Vigorously punishing typical freeloaders and giving merchants the right to clearly mark and feedback users' malicious behavior will not affect the consumption and purchasing experience of ordinary e-commerce users, but it can effectively deter violations and illegal behavior from the user side and bring the relationship between users and merchants into a virtuous interactive cycle.

From a broader industry perspective, more detailed stratification of user types and reducing the impact of illegal activities such as "薅羊毛" on merchants should be an important means for major e-commerce platforms to improve the business environment on the user side by 2025.

4. Final Thoughts

It will take time for the overall e-commerce ecosystem to get back on track. It is also impossible for the platform to find a new balance between merchants and users by adjusting the rules in one fell swoop.

Taobao and other leading platforms took the lead in correcting their mistakes, which led to follow-up governance by more platforms. The improvement of the business environment for merchants will not necessarily have a sudden effect under the current environment, but it is important to persist and be meticulous.

The feelings of merchants and users will also come silently.

The 2022 Double 11 E-commerce Financial Services Report shows that small and medium-sized businesses account for more than 80% of my country's e-commerce market. In the past two years, with the increasing popularity of the concept of "personal stores", this ratio will only be higher.

Whether it is merchants or users, the vast majority are ordinary people. The wool party and illegal merchants and users are ultimately a small group. Under a more sound and reasonable platform rules and market legal environment, black and gray industries will always hide.