CNBC AI Exclusive | May 24 — Douyin Life Services, the local commerce arm of TikTok’s Chinese counterpart, has launched a crackdown on merchants bypassing its payment ecosystem, signaling heightened scrutiny over transaction integrity in China’s hypercompetitive on-demand services market.
The platform announced its “Anti-Transaction Diversion Initiative,” targeting businesses that redirect users to off-platform payment methods after initial engagement. Violations will be penalized under newly strengthened Douyin Life Services Merchant Guidelines, with biweekly public disclosures of offenders starting May 26.
The policy specifically addresses “transaction diversion” — defined as merchants incentivizing customers to complete purchases outside Douyin’s infrastructure through tactics including:
- Promoting cash, card, or third-party payment alternatives
- Offering exclusive membership discounts to circumvent platform deals
- Undercutting listed prices via private arrangements
- Post-redemption upsells through unofficial channels
- Directing traffic to rival platforms during live streams or communications
- Exploiting technical glitches or rebate schemes to divert transactions
“These tactics undermine platform economics and expose consumers to fraud risks,” a Douyin spokesperson told CNBC. “We’re deploying AI monitoring, manual audits, and crowd-sourced reporting to maintain ecosystem trust.”
Enforcement escalates from warnings to permanent bans, with penalties tied to violation severity: score deductions, content throttling, product removals, and group-buying feature suspensions. Q1 2024 saw 45,000 merchants flagged under the policy.
Industry analysts observe the crackdown aligns with ByteDance’s broader monetization strategy. “By tightening payment controls, Douyin strengthens its position as a digital gatekeeper while protecting partner margins,” said Ming Zhao, a Shanghai-based e-commerce consultant. “The biweekly shaming list adds reputational stakes to compliance.”
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