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Business

Social media playing key role in Chinese e-commerce

A real Fruit Day shop in Shanghai

Liu Liu, a popular Chinese writer who releases her work on the Internet, had a story she wanted to tell via Weibo, a Twitter-like service with over 200 million active users per month.

     "I bought mangosteens via JD.com," Liu Liu started. "I opened the box that the delivery came in to find rotten fruit that looked like garbage. And the shop doesn't allow returns. Although the website carries beautiful photos, don't buy fresh fruit online."

     She also posted a photo of her delivery.

     Liu Liu has more than 10 million Weibo followers. Her pieces on family and social phenomena are widely read by young Chinese.

     She bought the mangosteens from Fruit Day, which uses JD.com's e-commerce platform. As soon as Liu Liu received the rotten fruit, she contacted the customer service center but received no reply. She spent the following few days sending photos of the fruit to the center.

     Then she went to Weibo.

     Less than five minutes after she posted the message, Fruit Day called to apologize. JD.com followed within half an hour. They offered her a full refund and to give her a 500-yuan ($78.5) gift card every month. But Liu Liu refused, saying she didn't want special treatment based on her celebrity status.

     "The final one kilometer" is a key metric for Chinese e-tailers, just as it is for its overseas brethren. JD.com is taking advantage of its own distribution network to get ahead of rivals Taobao and Tmall.com, which have difficulty securing delivery drivers during long holidays. JD.com is said to have taken some of Tmall.com's market share in the first quarter of 2015.

     The mangosteen trouble highlights JD.com's poor handling of customer complaints. Liu Liu concluded her Weibo post by saying, "Taobao isn't like JD.com. It would never respond in a way JD.com did." Followers who had similar experiences shared their frustrations. More than 3,000 people "liked" her story.

Kosuke Okame is a Shanghai-based business and market research consultant.

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