China will regulate eCommerce more strictly

by TLG Commerce

It may be the end of an era for the fake products populating Chinese eCommerce: according to Zhang Mao, minister of the State Administration for Industry and Commerce (SAIC), the market will be strictly regulated to promote “credibility and integrity”.

The statement follows a previous study published by SAIC, which had found 40% of the products sold on TaoBao to be fake. To regulate the market, Zhang proposes to increase the regulations and create a database, with the goal of protecting the final customers.

TaoBao has been unfamously known for being filled with fake products since its very first days. This was in fact one of the reasons for the creations of TMall, a platform developed with the purpose of offering authentic products to Chinese customers.

“The reason why there are so many market violations is that the cost of breaking rules is too low,” said Zhang. He hopes to create a better market by increasing these costs in order to make them unaffordable to companies.

These goals will be achieved by improving the communication between SAIC and eCommerce agencies, in order to provide guidance.

Following this dispute, Alibaba’s shares fell to about 30 percent from their highest point.

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