BEIJING, Jan. 14 (Xinhua) -- After five years of cautious preparation with repeated collection of public opinions and reviews, China's e-commerce law officially came into force on the first day of 2019.
The law differentiates e-commerce operators into e-commerce platform operators, vendors on e-commerce platforms and those doing business on their own websites, including both platforms like Alibaba's Taobao and those selling products via social network apps such as WeChat.
Analysts said the law is an important step to regulate online sales and purchases, protect intellectual property rights and create a sound consumption environment.
-- Providing legal basis for e-commerce industry
China's e-commerce market has been racing at a double-digit pace for years. E-commerce transaction totaled 22.69 trillion yuan in the first three quarters of 2018, up 11.2 percent year on year.
China's e-commerce market is generally expanding on a positive note, but some problems linger due to its rapid growth and low threshold for market entry, said Ma Zhengqi, deputy head of the State Administration for Industry and Commerce, an e-commerce watchdog.
The law requires e-commerce operators to disclose commodity or service information comprehensively, accurately and timely, in a bid to protect consumers' rights.
It bans vendors from unscrupulous practices like deleting shopper reviews, canceling orders at will and click farming, a move insiders say will make the focus of competition between sellers return to the quality of goods and services.
Cao Lei, director of China E-commerce Research Center (CECRC), said that the aim of the law is to lead the industry to be more standardized, and it makes China's legal system, industry rules as well as internal systems of enterprises further improved.
After the launch of the law, big e-commerce platforms in China rolled out a series of polices in succession as a response.
Insiders of Alibaba said that Alibaba has already established a mature platform governance mechanism which is transparent to merchants and consumers.
Suning said it has optimized seven management systems covering the whole chain from merchants to consumers and sales to services, realizing 100 percent licensed operations of merchants.
-- Exerting great impact on daigou or vendors on Wechat
Buying goods through private shopping agents (known as daigou in China) or vendors on Wechat is increasingly popular among Chinese consumers in recent years.
According to data released by CECRC, China's online shopping users in the first half of 2018 reached 569 million, up 10.2 percent year on year.
Besides, data provided by industry analysis website www.ibaogao.com showed that vendors on Wechat in 2017 hit 20.18 million and the number is likely to reach 30.3 million in 2019.
The prosperous development of daigou and vendors-on-Wechat industries has also brought plenty of problems, such as tax evasion, fake goods and personal information disclosure, seriously harming the consumers' rights.
The e-commerce law requires e-commerce operators to register their business, pay taxes accordingly and be held responsible for fraudulent goods, bringing daigou or vendors on Wechat formerly in the grey zone under the strict supervision of laws, in a bid to regulate online shopping. Rule-breakers can face fines up to 2 million yuan (290,900 U.S. dollars).
After the launch of the law, most daigou raised the prices of their goods slightly to deal with possible risks. Still, many daigou hold a wait-and-see attitude, choosing to halt their business for several months.
Some insiders believe that the tax will lead to the rise of the operation cost of daigou whose profit point lies in the exemption of duties and consumption tax, making it difficult for them to compete with big e-commerce companies and platforms. Some even worry that tightening regulations and rising costs will pressure such small e-commerce vendors out of the market.
However, some experts believe that in the long run, the law will help daigou industry achieve sound and sustainable development.
According to Hong Peilin with Shenzhen E-Commerce Service Center, the law will help promote the fast and healthy development of daiou that operate legally and crack down on illegal operators, setting strict threshold for access to the industry and regulating the industry development.
-- Providing dev. opportunities for cross-border e-commerce business
China has large growth potential for the cross-border e-commerce business, as the industry's transaction volume is expected to be 8.8 trillion yuan (128 billion U.S. dollars) in 2018 and will likely reach 12 trillion yuan in 2020, industry website ec.com.cn reported.
By 2020, China's cross-border e-commerce business volume will account for 37.6 percent of the country's total foreign trade, with an industry annual growth rate of nearly 20 percent, according to the report.
The e-commerce law contains a batch of regulations favorable for the development of cross-border e-commerce business, such as establishing and completing related management systems, encouraging small- and micro-sized enterprises to participate in cross-border e-commerce business, promoting exchanges and cooperation on cross-border e-commerce business between different countries and regions, etc.
-- Plenty of efforts still need to be made
Some experts pointed out that the e-commerce law is still a basic law and many details still need to be further illustrated.
Some content of the law are only framework and principle provisions and some provisions need to be further refined, noted Yu Bo, a lecturer at the School of Intellectual Property, East China University of Political Science and Law, adding that varieties of problems will keep emerging during the fast development of e-commerce business, and thus related laws should be introduced accordingly to solve these problems.
It is reported that China's Ministry of Commerce (MOC) is studying on relevant supporting regulations of the e-commerce law, in a bid to establish and complete standard system regarding e-commerce and quicken the research and formulation of industry standards in key areas such as common basis, operation service as well as supervision and management.
The effects of the law still need to be tested by time, but what can be assured is that it needs to be upgraded with the development of the e-commerce industry, so as to create a fair transaction environment and boost the industry development, said industry insiders. (Edited by Gu Shanshan)
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