E-commerce law aims to establish guidelines

Most individual sellers on e-commerce platforms and social networking sites are taking a wait-and-see attitude after the country’s first e-commerce law took effect this week.

Lawyers and analysts say many relevant rules still need to be set to make it clear what would count as business activities and what maybe excluded.

The new law stipulates that all individuals, organizations or legal entities that sell products or offer services through online platforms, social networking sites or live-streaming platforms are an e-commerce vendor and must get a business license, pay tax and be accountable for fraudulent goods.

But some shopping agents who buy products overseas for resale in China that Shanghai Daily spoke to remain cautious and uncertain.

A Shanghai-based shopping agent surnamed Wang said he’s registering his business but added that the e-commerce law is just a framework with many details still to be specified.

Law ‘drives prices up’

Some agents with no business license have had to withdraw their storefront from Taobao temporarily.

But some consumers complain they now pay more because fewer vendors are providing services and many are only offering direct mailing service from overseas instead of a third party transfer postal service, which saves overseas shipping costs.

Another Shanghai office worker who uses her spare time to sell tailor-made jewelry said she has a business license but is also taking precautionary measures such as limiting the amount of payments through WeChat for fear of having to pay tax.

“Consumers and e-commerce platforms as well as vendors will view the e-commerce law as a signal that selling merchandise through the gray market now constitutes unlawful activities,” said Cao Lei, a director at China E-commerce Research Center consultancy.

Shanghai Yida lawyer Dong Yizhi said collecting tax from individual sellers who bring back overseas merchandise for sale has been difficult and requiring business registration is a first step.