The new e-commerce laws in china, what has been changed?
The Electronic Commerce Law of the People’s Republic of China is a general term for the Government’s legal norms, regulating the various commercial transaction relationships arising from transactions generated by enterprises and individuals.
First of all, as omnichannel e-commerce is trending in China, micro-businesses and live streaming sales are included in the category of e-commerce, which means “international shoppers” on e-commerce platforms or social networks like Taobao and JD, or WeChat moments, and bloggers selling goods on live streaming platforms are all e-commerce operators! We can say that the introduction of the new e-commerce law has changed the public’s perception of e-commerce to some extent.
According to the new e-commerce law, an e-commerce operator can be anyone who sells products or provides services through the Internet and other information networks. With the exception of individual sales of home-produced agricultural and sideline products, cottage industry products, small trading activities and other forms, all others must register for a business license in accordance with the law or face a fine of up to 10,000 yuan!
According to Article 39, any e-commerce “astroturfing” behavior is strictly prohibited. Indeed, some cyber paid posters use cheating and counterfeiting methods to disrupt the e-commerce market, taking advantage of loopholes in e-commerce to improve the credibility and rating scores of many online stores, and this kind of behavior should be eliminated.
Furthermore, the “price discrimination” system is about to be terminated. In fact, price discrimination has been an online selling strategy for a long time. For instance, some companies would classify their users in order to gain more profit margin by using big data technology, for which methods could be:
- According to the geographical location, if there are fewer shopping malls or stores nearby the user, the displayed price will increase.
- According to the consumer’s consumption record, if he is part of the luxury kind, the company would also increase the price accordingly.
- According to the user’s search history (search words used, time spent searching, and frequency of searches), in order to determine whether the user is “just-looking”, “very interested” or even “urgent”, thus adjusting the offer accordingly.
- Different phone users would be shown different prices, e.g., an iPhone user could see a higher price than other phones.
- For new users, the vendor would give a higher coupon, or a newcomer experience coupon, but the final purchase price would be lower than the price displayed for regular customers.
Online “product bundling”, which is the practice inducing the selling of one product or service as an addition to the purchase of the main product or service, would not be allowed as a default parameter. Users’ personal information will be subject to a higher level of protection.
E-commerce operators shall abide by the laws and administrative regulations on personal information protection when collecting and using their users’ personal information.
Please note that Personal information protection law is one of 29 legal bills to be considered for the first time by the NPC Standing Committee in 2020, and will be their next major step. The Chinese personal information protection law won’t be less strict than GDPR for the reason that it is based on the latter, so compliance with personal information protection is also another important thing to make sure of in 2020.
At last, the delay in shipping time because of online shopping festivals like “double 11” will not be an excuse for vendors anymore:
According to Article 20, e-commerce operators shall deliver goods or services to consumers in accordance with the promises or the methods and time limits agreed with the consumers, and bear the risks and responsibilities in the transportation of commodities, with an exception for consumers who choose express logistics service providers separately.
In conclusion, with the introduction of the new “e-commerce Law”, new barriers for doing e-commerce in China are rising. they force e-commerce players to take relatively professional response, after all, the credibility of online stores and consumer trust can no longer be fabricated, the only solution is constantly optimizing e-commerce structure and improving their own e-commerce market planning, in order to survive in the e-commerce industry.
To read the entire Chinese e-commerce law in English, you can click here.