China is the world's largest market for e-commerce. Domestic e-commerce firms have the greatest share of China's market, with foreign companies having a comparatively small presence. The expansion of e-commerce in China has resulted in particular e-commerce patterns like the development of Taobao villages and livestreaming e-commerce.
E-commerce in China is regulated through a variety of means, particularly China's 2018 E-Commerce Law.
Since 2013, China is the world's largest e-commerce market. Its domestic e-commerce market was an estimated in 2016.[1] China accounted for 42.4% of worldwide retail e-commerce in that year, the most of any country.[2]
Domestic companies like Alibaba, JD.com, and Pinduoduo have the largest share of China's e-commerce market. Foreign companies like Amazon and EBay have not gained significant shares in the market.
The expansion of e-commerce in China has resulted in the development of Taobao Villages, clusters of e-commerce businesses operating in rural areas. Because Taobao villages have increased the incomes or rural people and entrepreneurship in rural China, Taobao villages have become a component of rural revitalization strategies.[3]
Livestreaming e-commerce in China was initiated by fashion e-commerce platform Mogujie in 2016.[4] In the same year, it was picked up and gradually made popular by Alibaba, who turned live commerce into a fixture in its annual Singles' Day shopping festivals.[5]
In 2015, the State Council promoted the Internet Plus initiative, a five-year plan to integrate traditional manufacturing and service industries with big data, cloud computing, and Internet of things technology.[6] The State Council provided support for Internet Plus through policy support in area including cross-border e-commerce and rural e-commerce.
In 2004, China passed an Electronic Signature law which was based largely on the United Nations model. The law encouraged the use of electronic signatures in e-commerce.
China passed its E-Commerce Law in 2018 following five years of significant debate among numerous stakeholders. Chinese policymakers encouraged wide participation in the legislative process, including seeking input from a wide variety of non-state actors including private tech businesses. The E-Commerce Law, along with other regulatory provisions relevant to e-commerce, is part of the broader mandate of the State Administration for Market Regulation.
The E-Commerce Law, along with the Consumer Protection Law, require e-commerce platforms to take proper action if they are aware or should be aware of fraudulent online behavior by merchants, including the sales of fraudulent goods. If merchants are found to have sold counterfeit goods, the Consumer Protection Law imposes a penalty of three times their value to compensate consumers. If platforms have prior knowledge of counterfeit goods being sold, then the E-Commerce Law makes them jointly liable with merchants engaged in sale of such goods. These risks also prompted platforms to take a stricter view towards shanzhai products.
In 2019, the city of Hangzhou established a pilot program artificial intelligence-based Internet Court to adjudicate disputes related to e-commerce and internet-related intellectual property claims.[7]
China prohibits the practice of review brushing, which is regarded under e-commerce laws and regulations as a form of false advertising.