China mulls online shopping legislation

BEIJING -- With China's e-commerce market expanding at full speed, the country is for the first time considering amending its consumer rights law to protect online shoppers' rights and interests.

The widespread of information technology has allowed the Internet, TV and telephone-based commerce to surge, said Li Shishi, director of the Commission for Legislative Affairs of the National People's Congress Standing Committee, the country's top legislature.

While briefing national lawmakers during a three-day bimonthly legislative session that opened on Tuesday, Li said new shopping forms such as e-shopping differed from conventional consumption, as online shoppers cannot identify the goods' authenticity and are susceptible to deceptive advertisement.

"Consumers select commodities merely through pictures and text descriptions," he said.

The consumer rights law, which was enacted in 1993, does not have stipulations on the protection of consumer rights in online shopping.

"Consumption patterns, structure and concepts in China have undergone great changes over the past two decades," Li said, adding that amending the law aims to adapt to the new situation in protecting consumer rights.

To deal with inadequate commodities or service information in online shopping, the draft amendments stress the protection of consumers' right to knowledge, saying sellers should provide authentic and necessary details of their products or services to e-shoppers.

The draft also ensures e-shoppers' right of choice and grants them the right to unilaterally terminate contracts. "Consumers have the right to return goods within seven days and get refund," according to the proposal.

"Online shoppers can ask for compensation from the e-trade platform where transactions took place if the seller has stopped using the platform," the draft said, adding the platform can claim compensation from the seller after offering compensation to e-shoppers.

The move is "significant" as it increases the responsibility of online platforms, which further protects online shoppers' rights, Hu said.

China's booming online commerce industry is expected to reap more than 1.1 trillion yuan (about $175 billion) in revenue in 2012, statistics from the Ministry of Commerce show.

The industry has experienced rapid growth in recent years, with its total revenue expanding from 25.8 billion yuan in 2006 to 780 billion in 2011 in China. The growth dwarfed that of many western countries.

Taobao, a consumer-to-consumer portal similar to eBay, features nearly one billion products and has nearly 500 million registered users. It sells 48,000 products each minute and its maximum daily turnover reached 4.38 billion yuan, according to taobao.com.

It's parent company, Alibaba, on track to become the world's largest e-commerce firm, also owns Tmall, a Chinese popular business-to-consumer portal like Amazon.

Although the draft's Internet shopping stipulations are "detailed and feasible," it mainly covered B2C trade, Hu said, adding currently about 70 percent of online transactions in China are C2C, which needs further regulations to protect e-shoppers' rights.

Complaints about online shopping are on the rise in China, with the number surpassing half of all service-related complaints in the capital last year, according to the Beijing Administration for Industry and Commerce and the city's consumers' association.

Cell phones and accessories, garments, domestic appliances and food are the categories that have been complained about most, said Huang Xiaowen, deputy director of the Beijing Administration for Industry and Commerce.

Online shoppers complained that online business runners did not fulfill discount promises or arbitrarily cancel orders. They also complained about late delivery and substandard products, according to Huang.

According to a MasterCard Worldwide survey issued last week, the Chinese mainland leads the Asia-Pacific region as the market with the most propensity to shop online, ahead of New Zealand, Australia, Singapore and South Korea.

The survey, conducted between November and December 2012, included interviews with 7,011 respondents from 14 markets who were asked questions about their online shopping habits. China's score has increased by four index points from last year's index.

Driving these shifts in China are increased confidence in shopping as "people felt more secure while shopping online," according to MasterCard. There is also an emerging view that shopping online is "easy" among 89.5 percent of the Chinese respondents, up from 80.8 percent in 2011.