China, with more than 1 billion netizens as of 2023, has been implementing and updating strong regulations on data security and consumer protection. However, amidst these efforts, complaints against Chinese e-commerce platforms have surged. Consumers are ever more raising complaints against Chinese e-commerce platforms, especially about the scarce quality of products purchased through live streams and the lack of after-sale services.
China’s e-commerce law and recent amendments
As the e-commerce business skyrocketed in the latest years, with more than 915 million people purchasing goods online in 2023, the Chinese government decided to enforce many regulations concerning online fraud and consumer rights protection. The “E-commerce Law of the People’s Republic of China” (中华人民共和国电子商务法) is one of the main examples. Published in August 2018, the provisions underlined the mutual development of online and offline business activities, stating that all the commercial exercises shall be done in the respect of good faith and enforcing punishment whether the vendor performs illegal or misleading promotions. This law was updated in October 2023 by adding new regulation changes concerning online fraud. In particular, the State Administration For Market Regulation (市场监管总局) enforced heavy punishments for fraudulent advertising in the medical field for every platform or vendor who tries to sell medicines labeled as “miraculous” and, thus, creating false expectations and false advertising.
The government is enhancing consumer rights regulations
In recent years, consumer rights regulations in China have become an important topic on the internet. As of 2023, more than 900 million users have engaged in online shopping, with consumer claims accounting for more than 55% of all online purchases. In response, on 23rd February 2024, the Chinese government enforced the “Regulations on the Implementation of the Consumer Rights Protection Law of the People’s Republic of China” (中华人民共和国消费者权益保护法实施条例) to safeguard consumers while doing online purchases, effective from July 1st, 2024. These regulations include strict penalties for websites and online platforms practicing false marketing and price discrimination. Furthermore, the Chinese government has forbidden other tactics merchants can adopt, such as deleting negative reviews, granting cashback for positive reviews, and promoting “deceptive influencer marketing” (虚假种草).
Livestreams: the new entry in consumer rights regulations in China
Live streaming services in China, in addition to merchants and e-commerce platforms, have been prompted to update their policies on consumer rights regulations. Since the outbreak of Covid-19, live streaming has gained enormous popularity among Chinese users, generating revenue of RMB 4.92 trillion (USD 679.7 billion) in 2023. Therefore, the government immediately adopted measures to regulate this phenomenon and avoid fraud and scams.
It all started in July 2020, when the Chinese Advertising Association (中国广告协会) released the Code of Conduct for Live Marketing (网络直播营销行为规范), setting new regulations for live streamers, such as using real names on profiles, restricting vulgar content, and prohibiting misleading advertisements.
Two years later, in March 2022, updates were made to the regulations on consumer rights protection in China. The State Internet Information Office (国家互联网信息办公室), the State Administration of Taxation (国家税务总局), and the State Administration of Market Supervision (国家市场监督管理总局) joined their forces to release the “Opinions on Further Regulating Live Commerce to Promote the Healthy Development of the Industry” (关于进一步规范网络直播营利行为促进行业健康发展的意见). These updated regulations strengthened laws against tax evasion and introduced periodic inspections to ensure the safety and quality of products sold to consumers.
The government imposed absolute transparency in live shopping
As the impact of live streams increased following the pandemic, online consumers began to highlight frequent issues while shopping through these channels, prompting a louder demand for consumer rights regulations in China. For example, they often complained that many channels turned out to be scams, leading to instances where after payment, they either received nothing or faced difficulties in obtaining a refund.
In response to these concerns, the “Regulations on the Implementation of the Consumer Rights Protection Law of the People’s Republic of China” (中华人民共和国消费者权益保护法实施条例) includes a section dedicated to consumer rights regulations for live streams. This new set of laws can be summed up through the slogans “谁在带货” (who’s carrying the goods) and “带谁的货”(whose goods are being carried) and impose the maximum transparency about the parties involved in online transaction and what goods are being sold, inflicting heavy punishments against whoever tries to falsify sales or lies about the quality of products.
New refund policies of e-commerce platforms: users’ opinion is split in half
To counter the pressures and the complaints about their after-sale services, in December 2023, many e-commerce platforms such as Taobao and JD.com implemented the “refund only” option (仅退款). The first e-commerce platform to introduce this kind of customer service was Pinduoduo in 2021, and within two years, other companies started to adopt it. This feature allows consumers to return their products in case of damages or poor quality, and get a refund without waiting for the vendor to receive the item. However, this after-sale service may not be as efficient as it seems.
Many vendors complained about the growing competition among e-commerce platforms, as they are pressured to reduce costs while maximizing quality. This discussion became very popular on social media platforms like Weibo, where users are split between two factions: those who take advantage of this “refund only” policy to have free items and those who believe that these refunds should not be abused, as it could have long-term economic consequences. As of April 2024, the hashtag “#仅退款#” has around 646,000 views and more than 1,000 discussions.
Tightening grip: evolving consumer rights regulations in China
- As online shopping and live streaming gain popularity, Chinese consumers are evermore worried about their safety on the internet. Therefore, the government took action to prevent the flourishing of online scams and fraud.
- After 2020, the need for further regulations about consumer rights protection increased significantly.
- On July 1st, 2024, the government will enforce one of the biggest sets of regulations concerning online shopping, named “Regulations on the Implementation of the Consumer Rights Protection Law of the People’s Republic of China”. These provisions are aimed at curbing online product fraud, addressing concerns related to both quality and pricing.
- As a result of the great popularity of live streaming, the newly updated consumer rights protection law also has a section completely dedicated to this online purchase method.
- Since 2021, major e-commerce platforms have implemented a “refund-only” policy, enabling consumers to receive refunds without waiting for vendors to receive returned items. However, there are concerns among consumers that this measure could potentially result in economic losses in the future.
