How Taobao Is Crowdsourcing Justice in Online Shopping Disputes

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How Taobao Is Crowdsourcing Justice in Online Shopping Disputes

To take some of the pressure off its customer service department, China’s largest marketplace is using a “people’s court” with half a million amateur adjudicators to help settle common consumer complaints. The online shoppers are winning.



Li Qiang says he enjoys shopping on Taobao Marketplace, China’s giant C2C website—so much so that he gets involved in the shopping experiences of others.

After he gets off work from his office job, Li occasionally logs onto Taobao’s User Dispute Resolution Center and spends the evening as a Taobao “dispute assessor.” With fellow volunteers, Li, 28, reviews evidence and makes rulings on disagreements between consumers and merchants in online purchases that have gone wrong, passing judgment on more than a dozen cases a night.

Acting as a juror in a Web-based people’s court is more than a hobby, Li says. “Participating in disputes helps me to better understand Taobao regulations, which might be helpful if I decide to open my own Taobao shop one day,” he says. “I also give constructive suggestions to my friends who own Taobao shops. They know online operations better than I do, but I have become proficient in customer service and dispute resolution.”

While jury duty is seen by many in the U.S. as an unpleasant civic chore, more than 575,000 amateur adjudicators like Li have willingly given up their spare time to serve the Taobao User Dispute Resolution Center since it opened in December, 2012, settling on average more than 2,000 consumer grievances a day over ill-fitting apparel, broken gadgets, overcharges and a host of other transactional disappointments.

Volunteers, who are unpaid, sit on 31-member panels that review evidence submitted by feuding buyers and sellers, with a simple majority vote deciding the outcome. Assessors can choose cases according to their interests, and may participate in up to 20 cases per day.

The center was originally established as a way to tap into the Taobao community, crowdsourcing the dispensation of justice in minor everyday disputes that inevitably occur between shoppers, merchants and the website that hosts them.

At the outset, assessors were called in to help resolve disagreements between Taobao merchants and Taobao itself in cases where store owners believed they had been unfairly penalized by the company for violating website rules. In June 2013, the system was expanded to include consumer complaints against merchants.

In most online marketplaces—shopping websites that host third-party vendors instead of doing the selling themselves—the site operators are responsible for policing the sites and have the last word in buyer-seller disputes. Taobao Marketplace, owned by e-commerce giant Alibaba Group, is no different. Its customer service department has some 1,000 employees, roughly 400 of them assigned to handling complaints.

But, given that last year there were more than 12.7 billion transactions on Alibaba platforms, establishing a volunteer army to settle minor cases was seen as a way to ease some of the pressure on paid employees, at the same time giving Taobao users a voice in how the website is run.

“Many people want Taobao to be more transparent and for transactions to be clean and fair,” says Wang Yujia, director of operations development for Taobao’s customer service department. “We wanted to create a system where buyers and sellers could give feedback on Taobao’s principles.”

In the past 13 months, more than 238,000 online-shopping disputes have been settled by the center. Taobao officials stress that disputed transactions last year accounted for less than .08% of total orders placed on Alibaba’s China retail marketplaces.

Both buyers and sellers can volunteer to be dispute assessors. Only users whose identities have been verified and who have been Taobao members for at least a year can join.

Assessor Bu Jingyuan, 28, said he joined the center several months ago because he wanted to learn more about Taobao’s regulations. Now he finds the work diverting.

“I use it as a recreation after work,” Bu says, “and I even found out it’s a way to discover popular goods and credible sellers.”

The resolution process begins when an unhappy buyer asks for a refund. If the merchant disputes the claim, the customer is given the option of having the case settled by Taobao customer service or the center. Buyers then submit a formal complaint online and within three days must offer supporting evidence such as photos of the product purchased. Both buyer and seller state their case in an online forum, the records of which are reviewed by the 31-member panel before voting.

“Buyers tend to get more votes,” says Li, “since there is almost always a reason for a complaint.”

To ensure no one tries to subvert the system, there is no communication between the parties to the dispute and the jurors, who are anonymous. If you are a Taobao seller, you must participate in the dispute resolution process as a condition of keeping your storefront. In instances where a merchant loses a dispute but refuses to refund the purchase price, Taobao provides the refund to the consumer by deducting money from a deposit that all sellers plunk down when they join the marketplace.

The most common disputes handled by the center are, unsurprisingly, consumer complaints that items received did not match website descriptions, or that colors or sizes weren’t as advertised, says Wang.

Assessing blame isn’t always easy, and not all assessors are created equal. Taobao Marketplace ranks the abilities of the assessors based on the number of cases they have resolved and the complexity of cases handled; the most senior assessors are assigned to resolve the thorniest of disagreements. Although no one gets paid, the most active and effective assessors earn the right to direct charitable donations from Taobao to three designated non-profit organizations.

Currently almost one out of every three complaints that reach Taobao’s customer service department are shunted to the center. Taobao is looking to increase that proportion by developing a roster of specialists with expertise in particular areas, such as technical aspects of mobile phones and computer hardware, and people who are expert at recognizing branded products and can detect minute differences between clever counterfeits and real items.

Through the end of last year, feedback from assessors has led to improvements in more than 140 Taobao policies governing how Taobao merchants run their online stores. For example, Wang cited a case in which a buyer complained that he wanted to order just one of a particular item when a merchant required a minimum order of 10. “It was a technical problem with the system that didn’t allow sellers to specify minimum orders,” Wang said. As a result, Taobao no longer penalizes merchants with minimum-order policies for failing to sell odd lots.

Bu, the volunteer assessor, says he thinks Taobao is generally too soft on buyers. In particular, he thinks the site needs to devise punishments for phony buyers who get paid by a merchant’s competitors to leave negative ratings and comments on the seller’s storefront. “From my perspective, Taobao’s regulation support buyers in most cases,” he says. “I wish both parties could be regulated.”

He adds, though, that “actually the system has been improving in the past few months. I hope Taobao can keep on strengthening discipline.”

Editor’s note: The program is now focused on collecting feedback from volunteers and using their feedback to improve the platform’s brand-protection technology. The scope of the program no longer includes customer dispute resolution.

Taobao

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