It is difficult to say that the online shopping mall operator obtained understanding from a wide range of sellers regarding its planned free delivery service. Its decision to reconsider the plan is realistic.
Rakuten, Inc., the operator of the Rakuten Ichiba internet shopping site, has announced its decision to postpone the start of free delivery for products marketed by all Ichiba sellers, initially scheduled for March 18. Instead, the company is set to successively launch free deliveries by sellers that can accommodate such a service.
Rakuten's earlier plan was to offer free delivery for purchases totaling 3,980 yen or more per seller.
The costs incurred to offer free shipping must be borne by sellers or added to the prices of goods. Not all of the sellers have the financial strength to cover these charges on their own.
Wasn't there a problem with Rakuten's attempt to coercively proceed with its plan by only emphasizing the merits of its free shipping service?
Rakuten has insisted that if shipping fees are scrapped, sellers will be able to enhance their abilities to attract customers, thereby increasing their sales. However, there is no guarantee that such gains can be achieved. Some sellers have good reason to feel apprehensive about the plan.
Rakuten Ichiba is one of the leading internet shopping sites in this country with about 50,000 sellers. The site can also greatly influence consumer behavior. Rakuten should regain the relationship of trust it had with its sellers.
Rakuten's decision to postpone came after the Fair Trade Commission had demanded the Tokyo District Court issue an emergency order for Rakuten to temporarily suspend the free delivery scheme. The reason for the FTC's move was that Rakuten's plan could constitute an abuse of a superior bargaining position, which the Antimonopoly Law prohibits.
As a reason for its decision, Rakuten cited among other factors the fact that the spread of pneumonic infections caused by the new coronavirus is adversely affecting the distribution of goods. In making the decision, the company also seems to have considered angry responses from its sellers and the FTC decision.
On the other hand, Rakuten still insists that there is no legal problem with the free delivery service. It seems the company still wants to roll out the service among all sellers.
Rakuten has said it intends to offer financial assistance to sellers whose profits are cut as a result of the service. If the company seeks to expand the free delivery service, it should sincerely listen to the opinions of sellers about whether the measure is sufficient to cover their possible losses.
Some have said that shipping fees charged by Rakuten Ichiba are difficult to understand, as they vary from seller to seller. In some cases, the prices of goods are deliberately set at low levels, with high shipping fees charged.
Rakuten's aim of simplifying its shipping fee system in a manner similar to that of its competitor Amazon in Japan is understandable. Consumers can buy products without worrying about shipping charges on shopping sites that have abolished such fees.
Even so, sellers whose positions are weak should never be put at a disadvantage.
For the time being, Rakuten Ichiba has a mix of sellers offering free delivery for purchases totaling 3,980 yen or more and those not doing so. The company must provide consumers with thorough explanations.
-- This article appeared in the print version of The Yomiuri Shimbun on March 9, 2020.
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