Taobao, Tmall Sellers Get Out in Front of Looming Consumer Protection Laws

Thousands of sellers on China’s top two online shopping platforms, Taobao Marketplace and Tmall.com, will roll out an extended seven-day, “no-questions-asked” return policy to mark the implementation of new regulations governing e-commerce in the PRC.

Set to go into effect on March 15, China’s Consumer Rights Day, regulations promulgated by the country’s State Administration for Industry and Commerce are the first set of codified rules governing of the mainland’s booming e-commerce industry. The regulations are part of a wider set of amendments made to China’s consumer protection law released last October.

The new rules, aimed at curtailing e-commerce fraud and establishing a baseline for acceptable customer-service standards, mandates that online merchants provide seven-day, no-questions-asked return policies. The rule excludes certain products such as perishables, customized items and downloadable goods.

In anticipation of the new rules, officials for Alibaba Group, owner of Tabao Marketplace and Tmall.com, said more than 15,000 Taobao Marketplace sellers have signed up to extend the period during which consumers can make returns beyond seven days.

Some sellers are offering buyers up to 15 days to return goods without a reason. Currently more than 90 percent of product listings on Taobao Marketplace come with a return period of at least seven days.

Tmall.com vendors were already required to offer seven-day returns as a condition of joining the platform.

“The refinements made to the law will enable the further healthy and sustainable development of online marketplaces in China,” said Taobao official Chen Hongliang in a statement. “We believe the implementation of the online shopping seven-day return policy will make online shopping more reliable, increase consumers’ trust in the online shopping space, raise the overall level of customer service and enable capable sellers to take advantage of this opportunity to demonstrate their commitment to buyers.”

Under the new regulations, return shipping costs will be borne by consumers; the costs of shipping replacement items are to be negotiated by buyers and sellers, the government decreed.

The new e-commerce rules also call for online marketplaces to verify the identity of vendors, and for merchants to ensure the descriptions of the products they sell are accurate and true—requirements  already in place as a condition of selling on Taobao Marketplace and Tmall.com.

Alibaba Group said Taobao will set up a special committee to collect sellers’ views and suggestions and analyze the implications of the new consumer law.

In addition to the extended seven-day return policy, Taobao is also tightening rules surrounding the sale of maternal and infant products and cosmetics on its websites. Infant milk-powder sellers now have to register each powder’s “QS Certification Mark” with Taobao, and display relevant import certifications and the origins of the product in product descriptions. A cosmetic brand licensing system will also be developed by Taobao. Under Taobao’s new rules, maternal and infant product sellers and cosmetic sellers must give buyers a mandatory seven-day return policy.

An infant milk powder contamination scandal in 2008 that left thousands of infants sickened has spooked Chinese mothers into buying foreign branded milk powder whenever possible. This has made imported infant milk powder a booming category for online e-commerce platforms like Taobao Marketplace. The tighter rules in the maternal and infant category ensure that buyers’ rights in this category are protected, the company said in a press release.