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Check all terms clearly before making a payment.

HiTouch 10 September 2018

The rapid development of e-commerce in China brings ever-rising disputes between sellers and consumers on delivery, payment, product quality, etc. The fifth meeting of the 13th National People's Congress Standing Committee came out a new law on the e-commerce sector to regulate the current dishonest trading. The e-commerce law will be officially in effect from January 1, 2019.


What are the highlights of the e-commerce law?


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Image: parklu.com

 

1. Weishang(微商) and live streaming selling will be included in e-commerce, their business is restricted by the e-commerce law.

Weishang. A new a way of doing business appears and becomes popular in China mainland in recent years, its business based on the social media platform WeChat with two modes, one is running WeChat official store, and the other one is posting products on Moments, but the second one has developed into the pyramid selling in many Weishang business, from the top to the bottom of the pyramid, price of the products has been multiplied many times.

 

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Image: pmyuan.com

 

Streaming selling. Live streaming now is the hottest way to sell to Chinese consumers. In 2017, nearly 35 million people watched live streaming on the China e-commerce platform Taobao. Live streaming gives the seller the opportunity to introduce the product’s features and demonstrate how to use or style it. At the same time, viewers can directly ask any questions or voice concerns about the product.

 

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Image: wukong.com

 

2. Individuals opening Taobao stores require registered business.

Taobao dominates the C2C (consumer-to-consumer) e-commerce space in China. Currently, Taobao allows individuals (and not necessarily registered businesses) to sell directly to consumers.

 

Low barriers to entry on Taobao brings it negative reputations, Taobao struggles with a negative reputation for counterfeit products. Alibaba itself has little control over the situation as it has no oversight on inventory movements as individual stores coordinate their own order fulfillment.

 

Of course, the new e-commerce law will raise the threshold for individuals opening shops on Taobao, they need the registration from the Industry & Commerce department. Except for self-produced agricultural, sideline products, household handicraft products, and individuals who engage in handicrafts for the small-scale business.

 

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Image: Taobao homepage screenshot

 

3. Banning fake reviews

In most online shopping sites, customer feedback and reviews are a great source of reference before one makes a purchasing decision. The quality of the product, the delivery,  are rated by previous buyers who have received the particular item you’re looking at. The system uses stars and a rating from 1 to 5.

 

However, in some Chinese e-commerce sites, like Taobao, the seller get used to hiring people to make fake reviews or asking previous buyers to rate 5 stars by giving them coupons. "Dear, we will give you 2 yuan Hongbao in return for a five-star approval!". And the forthcoming e-commerce law aims to regulate this field.

 

Under the new law, e-commerce operators should disclose the most comprehensive, accurate, timely information regarding products to consumers. E-commerce operators are not allowed to make false or misleading commercial propaganda by making fictitious orders or user reviews, to deceive or confuse consumers.

 

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Image: Taobao review screenshot

 

4. No more default setting for packing deal

Package deals sometimes can bring conveniences by offering consumers an entire “set” that would include everything that they presumably want. For instance, booking flight tickets online could include hotel and ca