E-commerce sector welcomes revised consumer rights law

China's newly revised consumer rights law has been welcomed by e-commerce businesses, though its endorsement of shoppers' right to unconditionally return online purchases has stirred debate.

The revision to the law on consumer rights and interests, which was adopted by China's top legislature on Friday, regulates merchandise and service transactions through the Internet, television, phone and post for the first time.

The new law allows e-shoppers to unconditionally return goods for refund within seven days of transactions.

"We have noticed that the revised law has other articles balancing consumers' right of unconditional return and the interests of online businesses. So the current regulations are fine with us," said Yu Siying, deputy chief of the legal department of Alibaba Group, which runs taobao.com, China's leading online retailing platform.

The law requires consumers to pay logistics costs for returning the purchase and lists products not suitable for unconditional returns and refunds, such as digital items sold via downloads, audio-visual goods with the packaging removed, bespoke products, fresh and perishable goods, magazines, newspapers, software, and products about which the two sides agree on the return policy in advance.

In fact, a number of online shopping sites, including Taobao, have already introduced seven-day unconditional return and refund as a policy to attract consumers.

Zhao Zhi, senior legal consultant to Tencent Inc., another e-commerce company, told Xinhua that unconditional return and refund is like allowing consumers to regret their purchases, which can be positive for business.

"There were divided opinions about this article but, based on Tencent's experience, it is applicable and necessary," Zhao said.

"E-shopping, though growing much more popular, is still new to many Chinese. They do not feel safe to do it. The policy of unconditional return will make them trust online vendors and feel more secure to shop," he added.

Li Xue, moonlighting as a small vendor on Taobao, does not think the new law will affect her.

She has introduced a seven-day unconditional return policy and found her business increase.

"People are more willing to choose vendors who provide unconditional return. Actually it does not cost me much," Li said. "There are fewer than 10 returns a month. Most consumers will not do it intentionally."

However, some vendors have concerns.

Qian Ni, who acts as a purchasing agent for Chinese customers to buy luxury goods abroad, said the regulation might not be good for her business, which has already struggled through thin profits.

"I do not sell the products but buy them, ordered by domestic customers, from shops abroad. Even though foreign vendors allow return and refund, the international logistic cost will be huge," she said.

But Qian is relieved a bit as legal experts have explained that her business might fit in the category of bespoke products that are not suitable for unconditional returns and refunds.

Yu Siying noted that it will take some time for both businesses and consumers to get used to the new law.

"Before the law, some consumers may have never thought about returning products they do not like and some vendors might not have had the policy to make an agreement about return and refund with customers beforehand," she said. "We all need to carefully learn and understand the law."

In the first three quarters of the year, online retailing grossed 1.3 trillion yuan (210 billion U.S. dollars) in China, which is equal to last year's annual figure and up from 26.3 billion yuan in 2006, according to the Ministry of Commerce.

However, the China Consumers' Association received more than 20,000 complaints about online purchase in 2012 nationwide, about half of them about purchases of goods and service.

The revised law is expected to address these latest problems in China's consumer market.

Besides endorsing unconditional return, the law also clarifies the liability of online shopping platforms, such as Taobao. Consumers can seek compensation from the platforms if they do not provide valid contact details for vendors using their networks. In turn, the platforms are entitled to claim compensation from the vendors.

The law also has strict regulations on how operators should collect and use personal information and what punishment offenders will receive.