21 February 2020
The new law provides better protection to online shoppers and help ensure hassle-free transactions in cyberspace. Photo: Bloomberg
The new law provides better protection to online shoppers and help ensure hassle-free transactions in cyberspace. Photo: Bloomberg

POLICY WATCH: New law seeks to protect rights of online shoppers

Whether it’s because of the convenience, the fabulous discounts, the variety of goods being offered or all of these, Chinese consumers have taken to online shopping with much relish.

Today, e-commerce accounts for more than 5 percent of the country’s retail sales. And it’s growing fast. In the first three quarters of the year, online retailing grossed 1.3 trillion yuan (US$210 billion), matching the country’s retail sales for the whole of 2012 and up from 26.3 billion yuan in 2006, data from the Ministry of Commerce showed.

But because transactions are being done in a virtual world, where sometimes ugly intentions lurk and much is left to trust and chance, problems inevitably surface. And consumers find themselves getting the short end of the stick. Shipment delay or non-shipment of goods, wrong specifications, harmful ingredients, faulty products and wrecked goods — the list of consumer complaints is endless.

As e-commerce grows in popularity, the number of complaints from online shoppers also increases. A recent survey commissioned by a commerce ministry-directed organization said more than 70 percent of respondents complained the products they received did not match what they had seen on the screen. Almost 60 percent of shoppers were not satisfied with the product return policy set by the sellers, according to the survey.

What is to be done then? 

On Oct. 25, the National People’s Congress, the nation’s legislature, approved amendments to the 1993 consumer protection law, providing better protection to online shoppers and helping ensure hassle-free transactions in cyberspace.

In the first overhaul of the law after two decades, the government aims to regulate merchandise and service transactions conducted via the internet, television, phone and post.

Under the new law, for example, an e-shopper has the right to return a product bought within seven days if it is found to be defective or unsatisfactory, which is in line with the current arrangement with traditional retailers, although the buyer may have to pay for the logistics costs.

The revisions also increase the compensation for consumers and the fines for retailers who violate the law, especially in cases where use of the faulty products has led to sickness or death. Compensation is raised to three times the amount of the damage.

The law makes it easier for consumers to return goods bought online, while sellers will bear the burden of proof in case of disputes. It also requires e-commerce firms to strictly observe privacy rules such as seeking buyers’ permission for use of their personal data.

It has set strict regulations on how operators should collect and use personal information and what punishment offenders will receive.

Aside from obtaining consumers’ consent, e-commerce operators need to clearly explain the purpose, form and scope of information use before collecting and using personal information. They are banned from leaking, selling or illegally providing the information while being asked to adopt necessary technical measures to ensure the security of such data.

Consumers can seek compensation from online trading platforms if such platforms fail to provide valid contact details for vendors using their networks. After compensating consumers, online trading platforms are entitled to claim compensation from the vendors.

The law also protects online traders from those trying to abuse the system. It expands the list of products not suitable for unconditional return or refund. Digital products sold via downloads have been added to the list, which already includes audio-visual products with the packaging removed, bespoke products, fresh and perishable goods, magazines, newspapers and software.

While it is uncertain how the government can effectively implement the law to protect online shoppers, market watchers believe the revisions will help build a more consumer-friendly society while boosting domestic consumption, which the central government hopes will become the new engine of economic growth.

The revised consumer protection law takes effect on March 15, 2014, the World Consumer Rights Day.

– Contact the reporter at [email protected]


EJ Insight writer