New Regulation for the e-Commerce in China
China’s market regulator has introduced a series of ecommerce laws Monday to reflect recent developments in the sector. These include livestream sales, user privacy and forced exclusivity.
The IPO of the Sharing Economy Giants in China
Energy Monster, a Softbank-backed Chinese power bank rent company, has applied for an initial public offering (IPO) in the US. According to an IFR report, the company is looking to raise $300 million. According to the prospectus, the company had raised $200 million in a D round. It was led by Alibaba’s Taobao China as well as CMC Moonlight Holdings. CGI and Hillhouse Capital followed.
Tmall and taobao in China are the cash machine of Alibaba group, and the leading e-Commerce app in the country. source
The main difference between Taobao and Tmall is the price and also that one must be approved by the app before setting up their store on the Tmall marketplace while on Taobao
“From RMB 2.0 billion in 2019, the company’s 2020 total revenues increased 38.9% annually to RMB2.8 billion ($430.6 mil) Its net income decreased by more than half to RMB 75.4million in 2020, from RMB 166.6million in 2019. (SEC filing)” explained this lawyer in China.
Hello Inc., a bike rental company, filed confidentially with US Securities and Exchange Commission to request an IPO in the US.
Financial new reporting
Chinese online housing company Beike said Monday that its fourth quarter revenues rose 57.6% year-over-year to RMB 22.77 billion. It also reported net profits of RMB 1.01 billion, compared to losses of RMB 3.0 billion for the same period in 2019. The reporting period saw a 65.4% increase in gross transaction value. For the fiscal year ending December, the company reported net income of RMB 2.83 million. This was the first profitable year since August’s public debut. (Beike)
Yatsen Holding Ltd. (parent of budget cosmetics brand Perfect Diary) reported a net loss of RMB 1.5billion in the fourth quarter. This was a result of astronomical marketing expenses. The quarter’s revenue increased by 71.7% to RMB1.9 billion due to an increase in its user base.
Livestream e-commerce in China
China’s livestream market for e-commerce jumped by 121.5% in value to RMB 961.0 billion in 2020. This is an increase of RMB 433.8 million in 2019, but growth has slowed from 226.2%. Livestream shoppers are expected to increase 8.2% to 635,000,000 in 2021 from 587 million in 2020.
China’s market regulator has introduced a new set of ecommerce laws Monday that covers recent developments in the sector. These include livestreamed sales and user data privacy.
Why it Matters: These new rules, which address newer innovations in China’s vast e-commerce sector, are an important addition to the E-commerce Law, which came into effect in 2019.
Details China’s State Administration for Market Regulation released (in Chinese), rules governing transactions online at the annual 315 consumer rights protection gala.
These rules require that platforms selling via livestream ecommerce and social ecommerce must comply with the requirements of online transaction platforms as described in law. Since the 2019 release of the ecommerce law, livestreams and social media have been popular innovations.
The videos must be kept for at least 3 years by Livestream ecommerce platforms after the session ends.
Platforms must obtain consent from users to collect and use personal information such as biometric and medical data and financial accounts.
These new rules will also prohibit services from engaging in misleading practices, such as falsifying sales volume or audience numbers, and promoting positive reviews over other customers.
These guidelines prohibit any practices that encourage “forced exclusivity.” This includes suppressing merchants’ product listing rankings, blocking or removing such online stores, raising service fees, and removing or blocking them from one platform.
These measures are necessary for “improving online transaction supervision system”, regulating the space for online transactions, maintaining fair competition and creating secure online consume,” a report by state-backed news agency Xinhua stated.
Law personal data in China
Chinese regulators removed 106 apps from China’s app stores on Thursday for “excessive collecting of personal information,” which included one of the country’s most prominent cultural discussion platforms.
The Ministry of Industry and Information Technology’s removal of popular karaoke app Changba and New York-listed used electronic trading platform AiHuiShou and social networking Douban quickly became the most trending topic on Weibo. It’s China’s equivalent to Twitter.
Douban was repeatedly fined for failing to censor content
Current users can continue to use affected apps; however, new users won’t be able download them.
Didi Global, the nation’s most popular ride-hailing service has been removed from the app stores since July, when regulators announced an investigation into Didi Global’s data practices following its initial public offering of USD 4.4 billion in the US.
Douban was founded in 2005 and is most popular among educated young women living in the major cities of the country. It is well-known for its insightful and influential reviews on books and movies, as well as its discussion forums.