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Online Shopping Needs More Legislation

Popularity 3Viewed 3884 times 2015-3-24 11:23 |System category:News| business, shopping, percent, Nobody, online

As a newly-emerged business in China, online shopping is developing faster than expectation. A latest report by Ministry of Commerce shows that China’s online retail sales in 2014 reached 2.8 trillion yuan (447 billion USD), occupying 10.7 percent of the total retail sales of consumer goods. Nobody could imagine, five years ago, the figure was less than 250 billion yuan.


With one of every ten yuan spent online, Chinese people are becoming increasingly dependent on the Internet to buy various things. Nevertheless, there is a troublesome predicament coinciding with this boom: buyers’ legal rights have not been safeguarded as well as they should have been.


A February survey by a Shenzhen-based Internet company shows among roughly 40,000 respondents, 49.3 percent had experience of being sold counterfeits, 28.9 percent dissatisfied with their purchased products, not comforting to original descriptions on the webpages, and over 40 percent never reported to government regulators or e-commerce companies once their rights were jeopardized.


In fact, online shopping is a nontransparent process and unfair deal from the perspective of protecting buyers. Specifically speaking, sellers hardly provide enough products information on webpages, instead products are displayed by good-looking pictures, and hence buyers can’t check the quality or authenticity clearly; e-commerce companies have a deficient system and some are even unwilling to regulate sellers’ behavior; when buyers dissatisfy with the prepaid products, applying to get refunded is so time-consuming and the penalty for misbehaved sellers is so light that buyers would rather tolerate with losses.


To protect buyers from disadvantageous conditions, China has issued several regulations in recent years, although the results are not ideal. In 2010, the State Administration for Industry and Commerce (SAIC) issued an interim measure, stipulating that natural persons or company entities applying for initiating e-commerce business should present verifiable information to e-commerce companies, which are responsible for approving sellers’ registrations. The measure was not effective, because it bestowed the responsibility of regulating e-commerce market upon companies like Alibaba and, downplayed governmental supervision obligation and established a tiny fine-the highest is 30,000 yuan-for selling counterfeits. The result was that these e-commerce companies, possibly in tandem with sellers, didn’t take buyers’ complaints seriously, let alone tackling them well.


On March 15 last year, National People’s Congress revised the Consumer Protection Act by adding a new clause for solving the soaring disputes between buyers and sellers. According to it, buyers can be refunded at any case within 7 days after delivery, and if buyers’ legal rights are impaired, but can’t reach sellers for covering their losses because e-commerce platforms don’t perform their obligation of disclosing accurate information, e-commerce companies should cover losses before holding sellers accountable. The revised act is stricter, but defining how much information is proper for protecting buyers is practically ambiguous, and the principle of refunding buyers often becomes nullified because sellers always presume that products are not returnable, if logistics packages are tore apart.


Obviously, since the first generation e-commerce companies established in late 1990s, effective and practical e-commerce laws and regulations have long been absent, until now delay of legislation still lingers on. The latest verbal grenades between Alibaba and the SAIC over who should be blamed for the counterfeit inundation in e-commerce sector demonstrate that promoting rule of law should be high on the agenda.  


Recently, the SAIC introduced two regulations, as effective supplements to the revised Consumer Protection Act. The regulations have practical solutions for disputes and push government to take more responsibility in e-commerce sector. One regulation stipulates if e-commerce companies and sellers neither take buyers’ complaints seriously nor get disputes solved, the SAIC should exert punishments on them, while the other regulates package completeness shouldn’t have been an excuse of refusing refunding buyers, instead buyers can return products with the least restrictions if the law allows.


Law experts suggest that as online shopping becomes popular and the government is eagerly to develop e-commerce industry, hammering out effective e-commerce laws and regulations is of great significance. Fortunately, the government and the legislative are joining hands on this matter. This March, many NPC deputies had proposed to issue a special e-commerce law, and the SAIC had vowed to finish drafting e-commerce law before late 2015.


The special e-commerce law is designed to solve e-commerce problems systematically, from regulating sellers’ behavior, to guiding e-commerce platforms’ practices and to protecting buyers’ rights. Time is clicking away, and we need to press ahead.


(Opinions of the writer in this blog don't represent those of China Daily.)




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Comment Comment (2 comments)

Reply Report ColinSpeakman 2015-3-24 14:30
The percentage reporting being supplied with fake products is almost 50%  That is shocking!  Or is it given we are in China?
Reply Report BlondeAmber 2015-3-30 19:53
I would say that more enforcement is needed.
More laws will mean more will be ignored.

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