Online business: WeChat buyers beware

By Han Yumeng

Ye Jiali, a 23-year-old senior in college, opens her WeChat to advertise her products on Moments and checks clients’ orders every morning after she wakes up.

“It’s the first thing I will do after opening my eyes,” she says.

Ye is an agent of Pearlosophy, a WeChat business brand, which mainly sells skincare and makeup products.

WeChat business is a mixture of mobile and social E-commerce in which business people sell products through WeChat Moments or official accounts. As WeChat grew stronger in China, this kind of sales model sprang up in 2013 and reached its peak in 2014. The small investment, low threshold, and widespread availability satisfy many young people who want to do business but don’t have enough funds and knowledge of how to run a business.

A survey conducted by the Internet Society of China shows that in 2016, there were 15 million people joining WeChat business, and its market reached to ¥360 billion. As a brand new marketing pattern, it guides a new E-commerce trend.

According to the survey, the practitioners were mostly women from 26 to 30 years old. There are several selling types of WeChat sellers, such as purchasing agents, brand agents, and individual operations. The brand agent is the most common role.

Ye said that the way to join a WeChat Business brand is becoming an agent by paying certain agency fees. There are several levels for agents to choose with different levels of payment and authority. She chose the top level, which cost ¥12,800.

“The way to make profits is selling products and recruiting new agents,” Ye said. She said her present income per month is about ¥50,000, the recruiting earning taking up 60 percent. “Now I have a lot of enthusiasm with Pearlosophy. Before joining it, I have never thought that I can support myself one day, so it’s a great opportunity in my life. I love my present life. It’s busy, fulfilling, and challenging,” Ye said.

However, according to The Industrial Report For Chinese WeChat Business In the First Half Year of 2015, after the accelerated expansion of WeChat business, it began to decline since 2015, marked by a sharp saleroom decline in the makeup field. The public apparently doubted the credibility and prospects.

According to monitoring results of online transactions in the second half of 2015, the Chinese courts received 26,700 online complaints, with allegations of WeChat products accounting for 41.5 percent.

“Inferior quality, price confusion, and frequent change on the website have become synonyms of WeChat business,” said Huang Zhihua, an employee of the Chinese Industrial and Commercial Bureau.

“Most of the WeChat business people didn’t take business registration when they started. They can sell products as long as they have a WeChat account. So we have great difficulties in making administrative penalties and enforcing laws when dealing with WeChat business cases,” Huang added.

Besides, there is no specific regulation and supervisory system for WeChat Business. In China, online sales are mainly bound by the Consumer Protection Law and Regulation on Online Trading, but both of them don’t have specific regulations for WeChat business.

Zhang Nanming is a lawyer focusing on civil litigation. She said that she had a food poisoning case three months ago when her client got sick after eating the bread she bought from an agent of Annixiong, a WeChat business food brand.

“Unfortunately, we had lost the court case. Because when my client bought the bread, she didn’t sign a particular contract with the agent; they just chatted shortly and then transferred accounts by WeChat Pay. So we had great difficulties in proving [our case],” Zhang said. “It’s a common failure of WeChat sales. Besides, the WeChat sellers don’t have physical stores, let alone the business registration. So if disputes happen, it’s difficult for victims to determine defendants. So the courts tend to refuse to accept these cases because they don’t have jurisdiction.”

Amid the controversy, WeChat business apparently has a long way to go.

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