China Tightening Rules for Internet Entrepreneurs

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July 8, 2010
By the ZippyCart Ecommerce Software Reviews Content Team

Sales of counterfeit and illegal merchandise have been a major issues for China over the past few years, as ecommerce sites have had very few rules enforced upon them to deter them from performing this illegal activity. This is why China’s State Administration for Industry and Commerce (SAIC) is getting into the mix, so they can implement new measures that will reduce the amount of illegal and counterfeit merchandise. SAIC calls the new effort the “Interim Measures for online commodity trading and related services,” and it went into effect last week on July 1st. Now under this measure, all online entrepreneurs are required to register their personal information, including names and addresses. Going forward, all of this has to be done before a new store goes live, and it will be much harder to commit fraud as their National Citizen’s Identify Card system is going to be used for verification. The small online entrepreneurs in China are not the only ones feeling the squeeze, as larger Internet companies must provide further proof and documentation that the business is legitimate.

Alibaba’s TaoBao is the biggest online shopping platform in China, and they have no issues with the new measures as they have already had their own system in place which requires proper registration with a real name. The general consensus is mixed for this new measure, as many online entrepreneurs feel that this is the the first step towards taxation of online income. In addition, much of the public is unsure if the measure will properly regulate online transactions in China. Overall this new measure should be viewed as a positive change toward reducing fraud with online entrepreneurs in China.