Online shopping in China requires effective supervision

The Internet research organization iResearch conducted the report indicating that China's online shopping market recorded a turnover of 120 billion yuan in 2008, up 128.5 % year-on-year. China's leading e-commerce website Taobao.com sold an average of 26 cell phones, 266 items of clothing and 136 cosmetic products per minute in 2008. Despite its huge attraction, in general online shopping has problems such as exaggerated advertising, passing off inferior goods as high-grade ones, and harsh conditions for product returns or replacement. There is also a great anxiety about the safety of money transfers. Online shops are spread all over the country and most of them do not have industrial and commercial registration. This poses certain difficulties for supervision. Recently service merchants such as Taobao.com established their own grading and complaint-lodging systems but consumers still have doubts about their effectiveness. Zhang Zhengfeng, associate professor of the School of Public Administration at China's Renmin University, said online shops cannot avoid policy supervision forever and must be regulated under standardized management just like traditional stores. The Beijing Administration for Industry and Commerce last year became the first in China to require all profit-generating online stores to apply for operational licenses. This approach provides a basis for law enforcement in terms of management and guides individual online business operators to adopt standardized operations. Most online shopping websites now adopt the third-party guarantee payment system, such as Alipay, used by Taobao.com, and Anfutong, used by Eachnet.com. When using these payment tools cash is paid on delivery and therefore the system is safer. But if buyers need to return purchases for reasons other than a quality-related problem, sellers often find it hard to agree, and hence typically a dispute emerges. An industry insider said dispute settlement mechanisms must be established and improved, and consumers are better off choosing large-scale service institutions and sellers with sound credibility in order to strengthen safety.