Page 286 - 2019 White Paper on the Business Environment in China
P. 286
9 White Paper on the Business Environment in China
negative influence on the development of cross-border up a convenient and efficient reporting and complaint
e-commerce. Tong suggests that Chinese e-commerce mechanism for customers. The law is intended to “make
firms and importers should heed turbulence in the the fence tighter” against unethical sales practice on
international trade environment and improve their the internet, though it is unlikely to eliminate such
global competitiveness. Meanwhile, the e-commerce problems as pirated products and trademarks. Problems
platforms should explore new markets and adopt new like fake products and difficult reporting channels are
technologies and applications to ensure the high- perplexing domestic consumers, even on some well-
quality development (Xinhua, Cross-border). known e-commerce platforms in China in recent years
(Global Times).
Of course, e-commerce floats east and west
across the Pacific. Kroger is now selling its products Yet, the original intention of the law, according to the
on Chinese e-commerce site Alibaba, the latest in a South Morning Post, was avoid online sales platforms of
series of initiatives to bolster its digital business. The fake goods and clean up the country’s reputation as a
Cincinnati-based grocer is transforming its business as major source of knock-off merchandise. Ultimately, it
it rallies against giants Walmart and Amazon. Kroger could pose a greater risk of sanctions for the country’s
acquired a stake in British online supermarket Ocado smaller online shopping platform operators, which
in 2018, agreed to buy meal kit company Home Chef may not have the same capabilities as China’s bigger
and launched grocery delivery service Kroger Ship. The players when it comes to identifying and removing
grocer has opened an online storefront on Alibaba’s counterfeit products. Large e-commerce companies,
platform for international brands, Tmall Global. Its focus such as Alibaba Group Holding and JD.com, should be
will include dietary supplements and private label able to cope with the risks because much of what will
products under the brand Simple Truth. China’s interest be required by the new law has already been put in
in overseas nutrient products is growing, fueled by the place by these major platforms. Alibaba monitors the
country’s increased focus on health and wellness and listings on its Chinese e-commerce platforms Taobao
amid limited confidence in its own safety standards. Marketplace and Tmall in real-time, using image and
Kroger’s Simple Truth line, launched in 2012, has since character recognition to identify listings that are likely
grown to reach US$2 billion in sales. The Kroger/Alibaba to be hawking counterfeit goods. Once the listings are
partnership is the latest effort of a U.S. retailer to rethink flagged and identified as fraudulent, Alibaba can then
its global footprint (Hirsch). remove these from the platforms. A total of 240,000
online stores in Taobao caught selling fake goods were
Regulations closed in 2017, according to Alibaba. New York-listed
Alibaba removed 27 times more listings compared to
China passed a new e-commerce law in 2018 aimed takedown requests submitted by brands, according
at improving regulation over the flourishing market. to the company’s 2017 annual report on intellectual
It came online at the beginning of 2019. The law, property rights protection. Roughly 97 percent of the
which is set to “protect legal rights and interests of takedowns it conducted in 2017 were processed before
all parties” and “maintain the market order,” requires a single sale had taken place (Chen, Celia, and Soo Zen).
all e-commerce operators to fulfill their obligations
to protect consumers’ rights and interests as well as Direct Sales
personal information, intellectual property rights,
cyberspace security and the environment. The Direct selling is defined by Chinese regulators as
legislation stipulates that if a consumer suffers from a type of business model involving the recruitment
health problems as a result of a product bought online, of direct marketing sales agents or promoters and
e-commerce platforms will be held accountable if they the selling of products to end-consumers outside
didn’t properly audit the business qualifications of the fixed business locations or outlets. The top-three
sellers on the platform. E-commerce website operators direct selling companies globally—Amway, Avon and
also have the obligation to record and store product/ Herbalife—were all founded in the US, the largest direct
service information as well as transaction information selling market in the world. The US also has the largest
on their platforms. They should also guarantee that number of sellers—20.5 million in 2016. The US is the
this information is kept secret, complete and feasible. largest direct selling market, valued at US$35.5 billion
Domestic e-commerce platforms are also required to set in 2016, with China trailing close behind, at US$33.9
286
negative influence on the development of cross-border up a convenient and efficient reporting and complaint
e-commerce. Tong suggests that Chinese e-commerce mechanism for customers. The law is intended to “make
firms and importers should heed turbulence in the the fence tighter” against unethical sales practice on
international trade environment and improve their the internet, though it is unlikely to eliminate such
global competitiveness. Meanwhile, the e-commerce problems as pirated products and trademarks. Problems
platforms should explore new markets and adopt new like fake products and difficult reporting channels are
technologies and applications to ensure the high- perplexing domestic consumers, even on some well-
quality development (Xinhua, Cross-border). known e-commerce platforms in China in recent years
(Global Times).
Of course, e-commerce floats east and west
across the Pacific. Kroger is now selling its products Yet, the original intention of the law, according to the
on Chinese e-commerce site Alibaba, the latest in a South Morning Post, was avoid online sales platforms of
series of initiatives to bolster its digital business. The fake goods and clean up the country’s reputation as a
Cincinnati-based grocer is transforming its business as major source of knock-off merchandise. Ultimately, it
it rallies against giants Walmart and Amazon. Kroger could pose a greater risk of sanctions for the country’s
acquired a stake in British online supermarket Ocado smaller online shopping platform operators, which
in 2018, agreed to buy meal kit company Home Chef may not have the same capabilities as China’s bigger
and launched grocery delivery service Kroger Ship. The players when it comes to identifying and removing
grocer has opened an online storefront on Alibaba’s counterfeit products. Large e-commerce companies,
platform for international brands, Tmall Global. Its focus such as Alibaba Group Holding and JD.com, should be
will include dietary supplements and private label able to cope with the risks because much of what will
products under the brand Simple Truth. China’s interest be required by the new law has already been put in
in overseas nutrient products is growing, fueled by the place by these major platforms. Alibaba monitors the
country’s increased focus on health and wellness and listings on its Chinese e-commerce platforms Taobao
amid limited confidence in its own safety standards. Marketplace and Tmall in real-time, using image and
Kroger’s Simple Truth line, launched in 2012, has since character recognition to identify listings that are likely
grown to reach US$2 billion in sales. The Kroger/Alibaba to be hawking counterfeit goods. Once the listings are
partnership is the latest effort of a U.S. retailer to rethink flagged and identified as fraudulent, Alibaba can then
its global footprint (Hirsch). remove these from the platforms. A total of 240,000
online stores in Taobao caught selling fake goods were
Regulations closed in 2017, according to Alibaba. New York-listed
Alibaba removed 27 times more listings compared to
China passed a new e-commerce law in 2018 aimed takedown requests submitted by brands, according
at improving regulation over the flourishing market. to the company’s 2017 annual report on intellectual
It came online at the beginning of 2019. The law, property rights protection. Roughly 97 percent of the
which is set to “protect legal rights and interests of takedowns it conducted in 2017 were processed before
all parties” and “maintain the market order,” requires a single sale had taken place (Chen, Celia, and Soo Zen).
all e-commerce operators to fulfill their obligations
to protect consumers’ rights and interests as well as Direct Sales
personal information, intellectual property rights,
cyberspace security and the environment. The Direct selling is defined by Chinese regulators as
legislation stipulates that if a consumer suffers from a type of business model involving the recruitment
health problems as a result of a product bought online, of direct marketing sales agents or promoters and
e-commerce platforms will be held accountable if they the selling of products to end-consumers outside
didn’t properly audit the business qualifications of the fixed business locations or outlets. The top-three
sellers on the platform. E-commerce website operators direct selling companies globally—Amway, Avon and
also have the obligation to record and store product/ Herbalife—were all founded in the US, the largest direct
service information as well as transaction information selling market in the world. The US also has the largest
on their platforms. They should also guarantee that number of sellers—20.5 million in 2016. The US is the
this information is kept secret, complete and feasible. largest direct selling market, valued at US$35.5 billion
Domestic e-commerce platforms are also required to set in 2016, with China trailing close behind, at US$33.9
286
