New law provides foundation for more orderly e-commerce industry

The trade volume of e-commerce has increased more than tenfold in the past decade in China, and the turnover of online retail sales in China overtook that of the United States in 2013 to become the largest in the world. But that fast growth has been accompanied by problems. The E-Commerce Law came into effect on Jan 1 to better regulate the industry. The 21st Century Business Herald comments:

The fast growth of the new retail industry called for a law to better regulate the industry as doctoring sales data and comments, exaggerated advertising and unsupervised private purchasing, among other things, harmed the rights and interests of consumers.

The law enforcement departments have encountered considerable resistance from the e-commerce practitioners while trying to solve these problems because of the lack of legal support.

The legislature started drafting the law in late 2013. That it took five years to make, and the draft was revised four times, before it was passed on Aug 31 last year, reflects the prudence of the lawmakers as well as the fast changing landscape of the industry since 2013, which entailed corresponding amendments to the law.

The law stipulates the e-commerce practitioners are obliged to provide consumers with complete, real and accurate information regarding their commodities and services in a timely manner. The law also has explicit articles defining all the existing forms of cheating of e-commerce practitioners and sets out corresponding punishments.

Also, it is noteworthy that the law stipulates that all e-commerce operators－including private purchasing agents, private sellers on personal WeChat accounts and other platforms such as livestream websites－must now register with the administrative departments and pay tax the same as the major e-commerce platform companies, when previously they were not required to do so.

If the law is strictly implemented, it will start a chain reaction in the industry, as the operating costs of many e-commerce practitioners will increase. This may lead to a reshuffle in the market, but this is an overdue and necessary step to improve the overall business and consumption environment, which will be good for the development of the industry in the long run.