Online firms should ensure safety and quality, says Suning chief

Consumers try out electronics goods at an outlet of Suning Commerce Group in Zhengzhou, capital of Henan province. Suning successfully expanded its retail horizons by becoming a full-fledged e-commerce platform in 2014. [Provided to China Daily]

E-commerce firms in China will have to ensure the safety and quality of the products that are transacted through their platforms, according to a proposal floated by a leading industry official.

Zhang Jindong, chairman of electronics retailer Suning Commerce Group and a member of the National Committee of the Chinese People's Political Consultative Conference, the top advisory body, said his proposal aims to safeguard consumer rights and create a robust e-commerce system devoid of wrongdoings, counterfeits and poor quality products.

Online retail sales climbed to 2.79 trillion yuan ($450 billion) in 2014, representing a year-on-year growth of 49.7 percent. Though the segment accounted for 10 percent of the total consumption in China, it was bogged down by counterfeit products and copyright infringements.

Zhang said that it is important for online retailers to keep complete, accurate data and furnish evidence as and when required, especially while working with legislators and consumers. Online retailers should also be accountable for the repair, return or other associated problems pertaining to products sold through their platforms.

Zhang's proposal finds close parallels with the recent government regulations for the e-commerce sector. The State Administration for Industry and Commerce released an enhanced consumer protection regulation on Tuesday governing e-commerce purchases.

Under the new regulation, customers can return opened goods they bought online within seven days and get full refunds without providing any reason for the return. The rule is slated to come into effect on March 15.

Zhang's proposal also suggests that domestic leading companies should explore cross-border trade models in bonded areas.

"Cross-border e-commerce at bonded zones will be an important way to balance imports and exports. It will also help narrow trade surplus and stimulate domestic consumption. In addition, it will provide the best global commodities at the best prices for Chinese consumers," he said.

Last year, Suning expanded its retail horizons by becoming a full-fledged e-commerce platform. Suning posted earnings of 946 million yuan in the fourth quarter of 2014, representing a year-on-year growth of 17 percent. "In the Internet era, those who stay are the winners," he said.

Zhang said Suning's growth can also be attributed to the diversification of what was traditionally a home appliance portfolio. The company added a supermarket and baby and maternity products to its portfolio in the second half of 2014, and managed to attract consumers with lower-priced and bulkier toilet paper and infant milk formula.

Zhang said this year the company plans to set up 50 "cloud" stores to expand its online-and-offline presence, even as it continues to update its physical store presence. It will also target third- and fourth-tier cities and has chalked plans to open 1,500 new service stations to meet demands from the smaller cities.