The biggest gamechanger of modern times is e-commerce, and there’s enough proof to support this statement. There are so many new ventures coming up every day.
When it comes to e-commerce, China is no doubt the BIG ONE. The technological advances, internationalization, and consolidation of consumers’ buying power reflect how China has upped its game in the e-commerce sphere. To top it off, they have improved the infrastructure of national logistics and allowed smaller merchants equal opportunities to compete successfully.
The crux of the matter is that Chinese e-commerce firms have mastered the game of e-commerce. And it is not just limited to sales volume. They have a lot more to boast about, including premier same-day delivery services, live stream marketing, and amplified showrooms both on virtual and real platforms.
All this seems dazzling, right? But the question is: is China’s e-commerce under the blue? Many economists are engaged in debate, because of the recent events that followed the blocking of the public listing of Ant Financial by Chinese regulators. Ant is an integral part of the Alibaba empire and the biggest non-banking entity, providing all the banking facilities to e-commerce firms, including insurance and wealth management. This was followed by an allegation of monopoly that allegedly included an “exclusive dealing agreement.”
Another e-commerce platform Meituan was hit with an antitrust lawsuit as it supposedly didn’t include Alipay as a payment option on its main app.
Pinduoduo, another Chinese e-commerce company, was bashed for the death of two employees. Although one of them died by suicide, the company is still being criticized and investigated for its inhumane work hours.
These are important events, and the questions being raised are quite valid. Especially the monopoly issue. You can’t offer your consumer better prices if you kick out the competitors by virtue of your power. This misuse of power to incur one company’s products’ exclusivity, must be thwarted.
However, penalizing a company just because it has a larger market share is not fair. There is nothing wrong with a platform if it has evolved and claims a larger market share. Although the monopoly of power should be nipped, each e-commerce platform is a natural monopoly or a quasi-monopoly.
Platforms like Didi and TikTok are also natural monopolies in the sector of mobility and short videos. Social media platforms are, in essence, the same as they attract users, and some are more popular than others when it comes to social connections.
The fact that these big e-commerce platforms have a larger market is not the problem. However, all these events – mentioned in this article – show that it is sometimes difficult for the regulators to keep up with the technological advances these companies make to handle routine business operations.
Remember that it is not the platforms like Alibaba, Pinduoduo, or Meitan, the problem lies in the practices that deviate from the standard set of operations that are in place for the e-commerce businesses.
In cases like Pinduoduo, there need to be thorough investigations conducted so that no other employees have to lose their lives. The work ethics of these companies need to be regulated.