Today my post is about the Internet and e-commerce. Why I choose this topic? Simply because we live in a society where advancements can only be achieved through the contribution of these means.
It is an incontrovertible fact that the emerging, or better to say the “booming” of
e-commerce
in China is contributing not only in fostering internal consumptions which is needed to sustain Chinese economy, but also in rendering our life more convenient. This form of commerce experienced a rapid growth in 2011 and 2012 and it is expected to expand further in the next coming years.
The growing importance of
e-commerce
and the spreading of the Internet also, which is having profound changes on almost all aspects of our society and life, it has pushed legislators, both at national and international level, to adopt new legal instruments to deal with it and to foster its development. Europe for example has put the development of this form of commerce at the heart of its priorities (see:
http://ec.europa.eu/internal_market/fin-net/index_en.htm
)
Today the Internet, and in particular
e-commerce
, is the foundation for all business practices. It allows companies to establish a global presence, which is of paramount importance for relatively small and newly established entities who want to engage in cross-border trade. E-commerce is almost an absolute necessity. Engaging in
e-commerce
means doing business activities in an environment in which traditional rules need to be adapted in order to carry out transactions smoothly.
E-commerce
undeniably represents the new frontier in business activities. The legal environment in which it is developing, and the instruments adopted in order to regulate it, they have an important role to play in realising its full potential.
The theme, which can also be defined, “
doing business over the Internet”
somehow is already regulated by the Chinese legislator, in particular the current legal system for on-line transactions is governed, mainly, by the SAIC’s “
Interim Measures for the Administration of On-line Commodity Trading and Relevant Services Activities
” (hereafter the “
SAIC’s Measures
”), which took effect on 1 July 2010, since when on-line trading formally fell in the jurisdiction of the State Administration for Industry and Commerce in terms of market supervision. The scope of the
Measures
is to regulate behavior in on-line commodity trading, to safeguard market order in on-line commodity trading, and to guarantee the legitimate rights and interest of both the consumers and the business operators in on-line trading. Of course it exists a more comprehensive legal framework regulating e-commerce, but here the most important thing to be stressed is that it represents one of the key strategies to expand or to accelerate the sales in China. Small, medium-sized and big enterprises can trade their products and services efficiently through this mean, and it is not surprising e-commerce is expected to grow rapidly in China.
It is obvious that the widespread of e-commerce is the result of the expansion of Internet usage The internet is quickly becoming the first stop for people making a decision about buying a service or product. The number of internet users worldwide reached the two billion mark in 2011 with almost half of them (45%) living in Asia according to the EU report on E-commerce, i.e. ECOMMERCE EUROPE –Online payments 2012, issued May, 2012). China is the global leader in Internet usage, and about half of all people online are younger than 25 years old.
However in order to use e-commerce at its full potential it is necessary for the Chinese legislator to put in place a more organic legal framework which should instill more confidence among Chinese on-line consumers. It is also necessary to point out that most Chinese consumers are highly sensitive to price, however, in a society like this one which is permeated with the influences from Confucianism and other philosophies and where social status is an investment, some buyers are willing to pay a premium for items that will be seen by others such as clothes, mobile phones or cars, as the result of a personal success. The access to the Internet is a fundamental aspect of this ‘digitalized’ society and economy, and not only of vital importance for developing any online activity, but also for people and all category of citizen living in today’s hyper-connected world. Communications, especially via the Internet, instant messages and information available through the Internet are becoming an integral part of our life, and it is unimaginable a world without such a means of communication today. The entire society is evolving thanks to the use, and widespread, of the Internet, today not being connected to the ‘Net’ for the great majority of the people could mean being stranded in a remote island or in a desert, and for sure, this situation would impede the development of any sort of business.
Just to confirm this trend and to highlight the pace China is adopting to better integrate itself in this hyper connected society and to offer citizen more chances to browse the Internet, it is worth noting that earlier in. 2012, in Shanghai, China Telecom and the coffee chain Starbucks jointly put out free Wi-Fi hotspots across the city at more than 200 Starbucks shops. Moreover, Shanghai as part of the i-Shanghai project. Shanghai is expected to become a fully operational wireless city by 2015 (in line with the directives of the new five years plan). In an effort to reach the majority of the citizen, the Shanghai municipal government has been reported to be working on installing wireless access point at bus stops and soon on buses. In other parts of China, wireless and transportation has become a hot topic, for example Beijing, Hong Kong and Guangzhou authorities also have added wireless devices to bus stops so people not only can check the status of their bus, but passengers are also able to connect to the internet with their devices (smart phones and tablet pc with Wi-Fi capability). This abundance of access points (hotspots) in the Wi-Fi modality, may bring about some security concerns and risks of illegal access. In fact security issues have been on the scene in the past few months relating to questionable wireless Internet security. It is reported (i-Fi Alliance) that many users accessing the Internet with their portable devices (Wi-Fi mode) are not so comfortable and they are a little wary of public-provided hotspots because of the standard of the security offered when accessing the ‘Net.’
The way we live our lives will undoubtedly be changed substantially by
e-commerce
. An electronic transaction has to be respected and valued in the same manner as a written or oral contract. This is why it is necessary a predictable and precise legal system governing electronic transactions. New initiatives should also instil more confidence in on-line consumers. It is evident that China will become the world’s most valuable market for e-commerce, the only problem holding back e-commerce was the lack of trust. “Consumers worried (quite rationally) that online firms were fraudsters, or that their credit cards would be abused, or that purchases would get swapped for counterfeits during shipment. Alibaba overcame this by creating Alipay, a clever online arrangement that—unlike eBay’s system—releases payments to vendors only after clients confirm that they are satisfied. (See:
E-commerce in China – The great leap online
, 26 Nov. 2011 available at:
www.economist.com/node/21540260
)
As
e-commerce
will grow in importance and due to the fact that in a few years time a substantial percentage of both commercial (B2B transactions) and consumer contracts (B2C transactions) will be concluded through the Internet, the legal framework governing both the Internet and e-commerce is of particular importance. The legal instruments regulating the “Net”, and in particular
e-commerce
should, in fact, create a climate able to foster the growth of the latter rather than impede its development. It seems China’s efforts to foster the grow of e-commerce have been substantial and considerable, however a lot remains to do to fully exploit its potential.
– Cristiano Rizzi