Merchants on Alibaba Group’s on-demand food delivery platform Ele.me hurt by the coronavirus pandemic can look forward to lower commission fees, the company said on Wednesday.
Ele.me has set aside an initial RMB20 million ($3.2 million) to subsidize commissions for catering vendors in the 87 areas most affected by Covid-19 outbreaks across China.
“Some communities are still facing a serious pandemic situation so we have decided to further strengthen our efforts to help businesses,” Ele.me said in a statement.
The pandemic continues to loom large for business owners, particularly of small and medium-sized enterprises. SMEs’ average turnover dropped to RMB129,000 in the fourth quarter of last year from RMB131,000 in the previous quarter, according to a report by Ant Group Research Institute and the Guanghua School of Management.
The report found that small business owners rank operating costs as their biggest challenge — something the commission fee cuts will address.
“Small and medium-sized enterprises were hit particularly hard by Covid-19, so we want to make the policy easy to follow and help ease their stress,” Ele.me said.
Eligible merchants will enjoy at least 15 days of reduced commissions. The refund will go directly into their accounts before the end of March, with no additional checks required from the platform.
Merchants in all high and medium-risk areas designated by health authorities after March will also be eligible for lower commission fees, Ele.me said.
The Hangzhou-based company is helping businesses on the platform adapt to the pandemic in other ways as well.
Late last year, amid a city-wide lockdown in the northern Chinese city of Xi’an, Ele.me rolled out a mechanism enabling merchants to temporarily shutter their virtual stores without damaging platform rankings.
And in May 2021, Ele.me introduced greater transparency into its commission structure, allowing restaurants to see the breakdown of charges levied by the platform, including fees for technical services and delivery services.