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Introduction
Entering the Chinese e-commerce market is highly lucrative for global brands, but it requires strict compliance with local regulations. This article covers key regulations that brands must adhere to when selling online in China and offers strategies for navigating the legal landscape effectively.
1. E-commerce Law of China
1.1 Registration Requirements
- All businesses, including foreign entities, must register with Chinese authorities before conducting e-commerce activities in the country. This ensures that companies are compliant with tax and consumer protection laws.
- Failure to register can lead to fines or suspension of business operations. Brands should seek local legal advice to ensure proper registration.
1.2 Consumer Protection
- Under the E-commerce Law, brands are required to provide accurate product information and ensure that customers are well-informed about their purchases. This includes clear return and refund policies.
- Misleading advertising or failure to honor promises can result in legal consequences, so it’s essential to have transparent and compliant policies.
2. Cross-Border E-commerce Regulations
2.1 Import Taxes and Duties
- Products sold via cross-border e-commerce platforms like Tmall Global are subject to import taxes and duties. Brands must be aware of the tax brackets and ensure that taxes are factored into pricing.
- It is crucial to work with local logistics providers and customs brokers to ensure that products comply with import regulations.
2.2 Special License for Certain Products
- Products like cosmetics, health supplements, and food require special licenses or certifications before they can be sold in China. Brands must ensure they obtain the necessary approvals before entering the market.
- Compliance with product standards and safety regulations is key to avoiding penalties and product recalls.
3. Data Protection and Privacy Laws
3.1 Consumer Data Compliance
- China’s data privacy laws, including the Personal Information Protection Law (PIPL), require that consumer data be stored and processed within China. Brands must ensure that their data handling processes comply with local laws.
- Violations of data privacy laws can result in hefty fines and damage to brand reputation. Brands should prioritize secure data management and transparency with consumers.
3.2 Cross-Border Data Transfers
- Cross-border data transfers are heavily regulated. If a brand’s headquarters are outside of China, they must ensure that any data transferred complies with Chinese data protection laws and is reported to authorities when required.
4. Advertising and Marketing Compliance
4.1 Truthful Advertising
- Brands must ensure that all advertising materials are truthful and not misleading. Claims must be substantiated, particularly for products in sensitive categories like health or cosmetics.
- Ads that violate these rules can be banned, and companies may face fines or other legal actions.
4.2 KOL Endorsements
- KOL (Key Opinion Leader) endorsements must comply with Chinese advertising regulations. If an influencer promotes a product, they must disclose their relationship with the brand to maintain transparency.
Case Study: Chile Cherries and E-commerce Compliance
Chile Cherries navigated China’s e-commerce regulations by ensuring compliance with cross-border trade laws, obtaining the necessary licenses for their products, and adhering to local data privacy regulations. This meticulous approach enabled them to grow their business successfully in China, achieving a dominant market share.
Conclusion
Navigating China’s e-commerce regulations is essential for global brands looking to establish a presence in the market. By ensuring compliance with laws related to registration, consumer protection, data privacy, and advertising, brands can avoid legal pitfalls and achieve long-term success.
PLTFRM is an international brand consulting agency that works with companies such as Red, TikTok, Tmall, Baidu, and other well-known Chinese internet e-commerce platforms. We have been working with Chile Cherries for many years, reaching Chinese consumers in depth through different platforms and realizing that Chile Cherries’ exports in China account for 97% of the total exports in Asia. Contact us, and we will help you find the best China e-commerce platform for you. Search PLTFRM for a free consultation!
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