Further explanations, but in vain
Facing such a storm of attacks, Taobao at first decided to make further explanations. Since a large number of small business owners suspected the new measures were obviously aimed at increasing their revenue, Taobao said it did not adjust the previous rules on collecting service fees which are still 5% of the successful amount of a transaction volume.
Taobao emphasized that the new measures were taken to improve the shopping environment and service. It also introduced a year-end refund of "conditional" technical service fees, returning a partial or total amount of service fees collected to businesses according to their operational scale, service quality, and other indicators outlined within merchants' capabilities.
Of course, Taobao Mall will never tolerate fake and parallel imported goods. Should a merchant be found selling fake and parallel imported products, the store would be immediately frozen and the total amount of its liability deposit deducted. But all these measures are heading towards a positive effect in terms of achieving a better shopping environment.
However, the protesters never bought the story. Later, Ma described them as "people playing the Nazi anthem, hurting the innocent by shouting 'Eliminate all, destroy all.'"
In a statement released on October 11, 2011, Taobao said it will not "tolerate serious harm committed against innocent businesses because of differing views," and Ma said he will not give up on the planned reforms.
On October 12, 2011, Taobao made an urgent declaration that it had already referred the matter to the police. On October 15, it reiterated it would never give in.
But China Business News reported that many professional insiders of the B2C industry still think Taobao's new policies aim at raising the access threshold to provide more resources to large-scale business owners. In the long term, the concentration of resources will facilitate Taobao's revenue growth because bigger vendors definitely have a higher output.
Making compromises
The situation got out of control in a short time. Even the Ministry of Commerce stepped in to urge Taobao to defuse the situation and open a dialogue with the vendors rather than continue their obstinacy.
The Ministry of Commerce said in a statement over the weekend that it had ordered Alibaba to "appropriately address the matter" and respond swiftly to the requests of small vendors.
As things continued to deteriorate and more public voices tended to support the smaller vendors, Taobao finally released an announcement that it will postpone the original plan and delay the fee hike.
Having relented slightly from the previous gesture, only a half of the protesters returned to normal businesses, but others are still fighting for their rights.
Taobao revealed that they are investigating this matter. It was discovered that many of the rest are vendors that have breached the rules of Taobao Mall before, and it was likely they did so with a revenge mentality.
