Kuaishou to block Taobao and JD links and concentrate on its own e-commerce business amid public trust crisis

China’s second most popular short video streaming app Kuaishou recently announced that it will begin blocking links to online shopping platforms Taobao and JD.com starting March 1. According to Kuaishou’s statement, due to a “change of cooperation agreement”, links to Taobao products will not be able to be displayed at all inside Kuaishou, while links to JD.com products can still be displayed short video shopping carts and details pages, but not in live-streams.

Taobao has not responded to Kuaishou’s announcement. JD.com has responded by saying their corporation with Kuaishou is more focused on the supply chain, hence the recent change has almost no impact on JD.com.

Kuaishou has previously restricted link access to Youzan, a Chinese e-commerce platform backed by Tencent and Baidu, and Pinduoduo, the largest online shopping platform in China for low-priced goods.

In July last year, Kuaishou has released a “big moves” strategy for their e-commerce business unit, which emphasizes “big moves on building trust in e-commerce, big moves on establishing brands, big moves on assembling service providers”. In December last year, at a Kuaishou e-commerce summit, it proposed that it will provide more for more merchants and emerging brands.

Short video platforms like Kuaishou and ByteDance’s Douyin are expanding their presence in the e-commerce space with their large number of monthly active users. Kuaishou expects that its gross merchandise volume (GMV) could reach 900 billion yuan in 2022, and in 2021, its GMV reached 650 billion yuan.

Kuaishou’s move could be a signal that it wants to concentrate on establishing its own e-commerce ecosystem. On February 23, Kuaishou hosted an industry conference in Hangzhou. Titled the “Fast Pick”, the conference serves as a connection opportunity for brands and live stream hosts, aiming to create more efficient collaboration channels for both ends.

However, Kuaishou is facing a minor crisis in terms of its goal of “building trust in e-commerce”. One of Kuaishou’s top live streamers, Pingrong, was fined 62.03 million yuan on February 22 due to tax evasion, according to the tax departments of Guangzhou city. Pingrong and her husband Erlv, who is also a top live streamer on Kuaishou, have long been criticized for selling counterfeit products, flexing, promoting unhealthy ideology, and imposing negative influence on their followers.

Last year, Pingrong was accused by consumer electronics content creator Xiaoxin of selling fake DOOV phones. According to Xiaoxin, Pingrong sells over 10,000 counterfeit phones in one live stream session, resulting in massive outrage from buyers. To settle the matter and restore consumers’ faith in its live stream shopping business, Kuaishou offered to reimburse buyers with 3 times the original payment.

Pingrong has posted an apology statement on Weibo. Currently, Pingrong’s Kuaishou and Weibo accounts have been deleted, while Erlv’s account remains open. Users have been questioning Kuaishou’s decision to only delete Pingrong’s account since it was apparent to users that Pingrong and Erlv are a team and both have behaviors in the past that violated consumer’s trust.