China tightens e-commerce laws to protect consumers

China tightens e-commerce laws to protect consumers

Mon, 03/09/2018 - 12:05
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Alibaba Group 11 11

Events such as Alibaba Group's 11.11 Global Shopping Festival (Singles' Day) have helped e-commerce become a cultural phenomenon in China. Photo: AlibabaGroup.com

New laws have been introduced to protect consumers in the world’s biggest e-commerce market, with the Chinese government legislating to improve competition, fight counterfeits and tighten rules around the retention of shoppers’ personal information.

The new regulations, which will come into effect from January 1, were introduced late on Friday at the bimonthly session of the Standing Committee of the National People’s Congress, according to a report by Chinese news agency Xinhua.

Platforms such as such as Alibaba Group’s Taobao and Tmall, or JD.com, will be subject to the new laws, as will those doing business on their own websites and social networks, including Tencent’s popular social media app WeChat.

Consumer privacy is a big focus of the new regulations, with e-commerce operators faced with new restrictions on how they handle personal data.

E-commerce players with dominant positions will no longer be allowed to restrict or exclude competition, while new penalties will apply to operators not taking steps to stop merchants from infringing on intellectual property rights.

Other aspects of the new legislation included a requirement for China’s State Council and local governments to encourage environmentally-friendly packaging, storage and transportation in e-commerce.

“The law specifies regulations concerning operators, contracts, disputes settlements and liabilities involved in e-commerce as well as the market development,” lawmaker Yin Zhongqing said at a press conference held by the NPC standing committee on Friday, according to Xinhua.

“The law prioritises supporting and promoting the sustainable and sound development of e-commerce, which is an emerging industry.”

E-commerce players are expecting further implementation guidance to be provided by the Chinese government in coming months.

China’s e-commerce market was worth more than $US930 billion in 2017 and is expected to surpass $US1 trillion this year.

A recent study by Frost & Sullivan in collaboration with Azoya showed Chinese shoppers spent $US2,410 on average in 2017, with $US850 of that allocated to cross-border purchases.

However, Chinese official data shows a sharp rise in the number of complaints in regard to cross-border ecommerce, particularly around milk, milk powders and other foods, diapers, health care products and cosmetics.

ASX-listed milk exporter a2 Milk Company said the new regulations were part of a continued evolution of China’s regulatory framework around shopping online.

“The company welcomes the new e-commerce law and the Chinese government’s continued support of cross border ecommerce, which the company considers will ultimately further protect the rights and safety of consumers and the overall integrity of the channel,” a2 Milk said in a statement to the ASX.

A2 Milk said it would work closely with its partners to ensure it complied with the new regulations going forward.