Online shop owners fret over revision

Nearly 1,000 items ordered online await collection by students and staff at Xi'an International Studies University in Shaanxi province last week. Online shopping is increasingly popular in China, pushing legislators to revise the Law on the Protection of Consumer Rights and Interests. Yuan Jingzhi / for China Daily

Editor's note:

The revised consumer rights law, which includes a seven-day cooling-off period to return goods for refunds, has raised concerns among online shop owners about potential cost increases.

The revision to the law, which was passed by the Standing Committee of the National People's Congress, states that people can return goods up to seven days after they receive them by shopping online, by TV or by phone.

The revised law also lists four types of merchandise that cannot be returned - customized products, fresh and perishable products, digital products such as software and online downloadable goods, and newspapers and magazines - in order to prevent abuses.

However, online shop owners, especially those of small- and medium-sized businesses, are concerned about a possible increase in the number of products returned.

"It could be a blow for small- and medium-sized shops, because they do not have the financial capacity to absorb a cost increase," said Lin Nan, who owns a women's clothing shop on Taobao, China's largest online marketplace, in Nantong, Jiangsu province.

Lin said many shop owners on Taobao sell small products, and the policy on returned goods could reduce their profits.

"Many online shop owners are also only working part-time. An increase in returned products would force them to quit, as they would not have enough time to deal with the returns," she said.

Huang Guoxiang, who runs a clothing shop on Taobao in Foshan, Guangdong province, said, "There will definitely be an increase in costs if the number of returns rises."

Yu Siying, vice-president of legal affairs with Alibaba Group, the operator of Taobao, said the online shop owners' fears stem from the fact that they are not fully familiar with the new law.

"Many are not aware that there are four categories under which merchandise cannot be returned. That's why there is panic among shop owners," she said.

The revised law, which takes effect on March 15, also states that consumers can seek compensation from the online marketplace if it cannot provide an accurate name, address or contact number for an owner or operator.

Zhao Zhi, senior legal affairs consultant with Tencent, which operates several online marketplaces, said this means online shopping site owners will have to take stricter measures in approving new shops and also take more measures to ensure the rights of consumers are protected.

"The new provision means more responsibility and more risks for online marketplace operators. The cost of operations will increase as well," he said.

Yu said Alibaba Group has strict measures covering identity checks of online shops. It will seek further cooperation with the police in the handling of fake personal identities during the registration process for online shops.

Zhu Jianqiao, deputy director of legal affairs for the State Administration for Industry and Commerce, said most of the major online marketplaces have strict procedures for identifying online shops.

"The problem lies in some small online marketplaces not requiring strict registration procedures," he said.

Taobao has nearly 8 million online shops and close to 1 billion commodities on sale, the Ministry of Commerce said.

China's e-commerce market transaction volume reached 8.1 trillion yuan ($1.33 trillion) in 2012, while the number of online shopping users reached 242 million, said the China Internet Network Information Center.