Ecommerce Industry Update - April 26, 2018

Dear USCBC members interested in ecommerce:

In our regular review of policies and new reports related to ecommerce, we wanted to share the below regulatory updates.

In particular, we want to solicit thoughts from our member companies regarding recent reporting done by the Associated Press that accused Chinese ecommerce giant Alibaba of punishing brands who did not sign exclusive contracts with the platform and chose to sell on rival Jingdong. The article gave the example of one company that wanted to sell on both platforms, and subsequently had advertising banners taken down on Alibaba's Tmall platform, were blocked from special sales, and had their search results changed. This caused the brand's sales to drop by between 10-20%.

If you are interested in having an off-the-record conversation on this topic and benchmark with other US brands, we would love to talk with you. Please email Patrick Lozada ([email protected]), who manages USCBC's work on ecommerce, to learn more. 

Seven Departments Jointly Issue Guidance to Standardize the E-Commerce of Agricultural Products
March 23
Seven departments, including the General Administration of Quality Supervision, Inspection and Quarantine, Ministry of Industry and Information Technology, Ministry of Agriculture, Ministry of Commerce, State Forestry Administration, State Post Bureau, and China Federation of Supply and Marketing Cooperatives issued the Guidance on Establishing Standards for the E-Commerce of Agricultural Products. The guidance sets goals and establishes a framework to standardize agricultural product e-commerce. The standard will focus on quality ranking, processing, packing, and delivery and will be established at the state, industry, regional, community, and enterprise level.

China to Ease Market Access for Foreign Payment Firms
March 21
The People’s Bank of China (PBOC) issued the PBOC’ NO.7 Announcement. The announcement said China will open up its payments market to foreign companies. Foreign firms are allowed to apply for payment licenses and will be treated the same as local firms. These firms are required to have secure, regulated transaction and recovery systems in China with the capacity of processing payment services individually, according to the announcement. Clients’ data and other financial information originated and collected in China must be stored, processed and analyzed within the domestic area. Foreign-invested payment firms should abide by Central Bank regulations in their corporate governance, operation and risk management, the announcement said. Allowing foreign firms to enter the payment market with defined regulations helps boost innovation, creates a fair environment for competition, and improves the services of payment providers, the central bank said in the statement.