:max_bytes(150000):strip_icc()/GettyImages-2162294801-3008212ffd634d7e9a26d30b89c28b38.jpg "Alibaba Reportedly Switches To Percentage Fees for Merchants")
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Key Takeaways
- Alibaba reportedly will charge vendors on its Tmall and Taobao platforms a 0.6% service fee starting in September.
- Rival e-commerce firms PDD Holdings, JD.com, and TikTok-parent ByteDance have each made the switch to percentage fees in recent years.
- Shares of the company closed higher in Hong Kong and its American depositary receipts (ADRs) also were up Monday.
Alibaba Group Holding (BABA) reportedly announced plans to institute a software service fee for merchants, sending its American depositary receipts (ADRs) higher in intraday trading Monday.
Starting in September, the Chinese e-commerce giant will charge vendors a 0.6% fee on its Tmall and Taobao platforms, Bloomberg reported. The policy may be waived for small merchants, the report said, citing a source familiar with the matter.
Alibaba currently charges Tmall merchants a fixed annual fee, and also “earns the majority of its Taobao and Tmall revenue through customer management fees, which merchants pay to advertise products or better tailor their offerings,” the report said.
Alibaba did not immediately respond to Investopedia‘s request for comment.
Alibaba To Join Rivals in Switching To Percentage Fees
Rival e-commerce firms PDD Holdings (PDD), JD.com (JD), and TikTok-parent ByteDance have each made the switch to percentage fees in recent years.
Alibaba ADRs traded 2.4% higher at $78.39 as of about 1:15 p.m. ET Monday following the news. In Hong Kong, shares of the company closed nearly 5% higher.