To relieve financial strain on retailers, Chinese regulators have reportedly asked e-commerce system operators to stop requiring customers ‘ refunds without requiring the transfer of goods, according to two people with knowledge of the situation.
The state met with businesses, including PDD Holdings, and decided that single retailers could initiate a refund once the practice had been completed by July, without giving specific dates.
One of the persons who declined to be identified because the information is not available said that the goal is to avoid stores ‘ position from becoming weak during times of economic slowdown.
PDD and gaze JD.com did not respond to requests for comment. Requests for comment were never responded to by Alaba Group or the State Administration for Market Regulation.
In southeastern China, hundreds of people gathered at the PDD system Temu’s headquarters to rally its refund policy in July. Following that, authorities, including the industry regulator and the business ministry, gave the order for PDD to update the policy.
Authorities organizations like the National Development and Reform Commission and the Market Regulator have raised concerns about what they refer to as “involution-style” rivals in this year.
The saying” complete correction of ‘involution-style’ contest” was incorporated into the Government Work Report in March during the annual legislative session.
For some kinds of purchases, the refund-without-returns legislation was intended to benefit both buyers and sellers. In 2021, PDD started expanding the legislation, causing foes to following suit.
The plan is considered harmful to the bottom line for businesses selling items from all kinds of brands of clothing and home equipment because they run the risk of losing both money and goods.