Ezbuy defends business practice against Alibaba's 'derogatory' accusation

SINGAPORE — E-shopping service provider Ezbuy on Thursday (Dec 21) put up a staunch defence of its business practice, and accused Chinese e-commerce giant Alibaba of making a "derogatory" remark against it.

After being dogged over several weeks by delayed orders because of a spat with Alibaba, Ezbuy had announced on Monday that it has stopped offering its popular Buy-For-Me service with Chinese e-marketplace Taobao until further notice. Taobao is owned by Alibaba. 

Its latest media statement came after Alibaba on Dec 8 accused the Singapore company of "scalping" - a practice of creating accounts to buy items and reselling them – which was "in clear breach" of its rules.

Ezbuy said: "We are taking a serious stand to the inaccurate claims labelling ezbuy.sg as scalper. This is the first time Taobao has made such a derogatory remark to a local company here in Singapore."

The company noted that in the context of China's laws, products offered by a scalper are limited in nature or scarce, such as train tickets and concert tickets for example. "A scalper will stock as many products as possible to manipulate the supply and demand in the marketplace. (It gains) immensely high profits from selling the products," it said.

It is wrong to label Ezbuy as a scalper because it "does not control or manipulate the supply and demand in the marketplace", the company said. Neither does it stock any products as it only makes the purchases on Taobao when customers place their orders. "Normally, orders from customers are very scattered and includes a variety of different types of products. Hence, we do not benefit from Taobao's limited offers or utilise their vouchers or coupons, unless customers have given us instruction to do so," Ezbuy said.

Claiming that its shipping and agent fees are "the most cost-effective", Ezbuy said it "does not gain any unjustified high profits providing this 'daigou' service", referring to the term used to describe making purchases on someone else's behalf. "More importantly, customers always have the choice to buy directly from Taobao, or buy from ezbuy.sg, unlike a 'scalper', (which) only offers limited or no other options to customers," Ezbuy said.

Ezbuy also questioned whether Taobao disallows all forms of daigou businesses. "Many of our customers in Singapore engage our international logistic services through the 'Ship-For-Me' service and make their purchases on Taobao directly. However, some of them were not allowed to send their parcels to our warehouse address. Some of their accounts were also subsequently blocked after sending a few parcels to our forwarding warehouse address. If Taobao only blocks daigou businesses, why are personal users in Singapore affected as well?" it added.

Ezbuy had previously said it had more than 1,000 purchasing accounts which it used for placing orders on Taobao. This was seized upon by Alibaba, which pointed out that having "over 1,000 accounts that placed several orders at one go under a single address" and reselling them at a higher price went against the daigou regulations, and was "a typical case of scalping behaviour".

Ezbuy clarified that it initially had "only a few" purchasing agent companies in China handling the orders on Taobao. However after it started facing issues with its purchasing accounts on Nov 4, it had "no other option but to engage additional purchasing agents which included some of our employees and their immediate family and friends, to help us make the purchase in order to fulfil our customers' orders". The firm said: "These 1,000 accounts comprised not just our purchasing agents, but includes the personal accounts from employees, family and friends. This does not violate Taobao's rules and regulations."

With the company seeking to recover from the episode, it announced that it has plans to double its number of product offerings, by bringing onboard "more than 10,000 sellers" to list on ezbuy.sg. These sellers will contribute to an "additional three million products on top of our existing four million products available". It is also working on extending its reach to other popular e-commerce websites such as beibei.com, which specialises in infant and mother products, Ezbuy said.