November 30, 2017
China, in the midst of codifying e-commerce requirements for foreign and domestic companies that want to sell there, recently released its second revision of the proposed legislation. In the wide-ranging bill, the Chinese government aims to address consumer protection in a market that produces more revenue than any other in the world, but is still growing significantly. Among other things, it will significantly alter data storage and security requirements for companies selling in China.
According to published reports, the newest revision dropped a definition of personal information in favor of the definition contained in a cybersecurity law that took effect this summer. One of the main provisions of that law is that any e-commerce company seeking to sell in China would have to store personal data gathered from Chinese consumers on servers inside China and abide by restrictions on exporting that data overseas.
These and other provisions of the new law could make operating in China even more challenging than it already is. But, it is the largest e-commerce market in the world and is still growing significantly. The U.S. enjoyed its biggest online shopping day ever last week on Cyber Monday, when American online businesses generated nearly $6.6 billion in sales. On Nov. 11—China Singles Day—the e-commerce sites of Alibaba sold $25 billion worth of goods. Challenging or not, online businesses should be formulating a Chinese strategy.