Mon, Feb 20, 2017 - Page 3 News List

Chinese online vendors a threat: firms

NOT ACCOUNTABLE:The chief executive officer of Cite Media Holding Group said he could not return an item he bought from a Chinese vendor he found on social media

By Liao Chien-ying and Jonathan Chin  /  Staff reporter, with staff writer

Chinese e-commerce platforms and online vendors hold an unfair advantage over their Taiwanese peers, which puts local consumers at risk, Taiwanese online vendors said.

Several people working for Taiwanese online retailers said that China-based e-commerce firms — such as Alibaba Group Holding Ltd and its e-commerce platform Taobao.com, which was blacklisted by the US government last year for selling counterfeit products and breaching intellectual property laws — have in the past few years made inroads into the Taiwanese market.

Taobao and other e-commerce platforms — such as Shopee.com, which is owned by Tencent Holding, a Chinese firm registered in the British Cayman Islands — have flourished in the Taiwanese market and started to put pressure on local competitors, the people said.

A practice that has over the past year become a concern for local businesses is Chinese vendors’ use of Facebook advertisements to sell products in Taiwan, they said, adding that the business model allows Chinese vendors to circumvent Taiwanese tax codes and consumer protection regulations, giving them an unfair advantage.

Many Chinese e-commerce firms doing business in Taiwan have no registered offices, pay no taxes and have little accountability to the government or consumers here, the people said, adding that the companies have a competitive edge due to such unfair advantages.

Chinese online vendors’ practices have a negative effect on the Taiwanese online business environment, Cite Media Holding Group chief executive officer Ho Fei-peng (何飛鵬) said in an op-ed published in the Chinese-language Apple Daily on Monday last week.

Citing his experience with buying products from China through social media advertisements, Ho said that he was unable to receive a refund for an item of clothing that was the wrong size, adding that Chinese e-vendors using Taiwanese logistics firms can sell products without giving receipts.

The lack of accountability on Chinese vendors’ part is a threat to legitimate online businesses in Taiwan, Ho said.

“While Chinese retailers have always used Facebook advertisements to sell products in the Taiwanese market, the situation has lately become more serious. The trend is worse than Uber’s case, because it poses a danger to the property and lives of Taiwanese,” said an e-commerce business owner who declined to be named.

Transactions made on Facebook might compromise consumer rights, because vendors cannot be readily identified in case of fraudulent activities, and consumers often face difficulties seeking refunds after purchasing items that turn out to be of low quality or unsuitable for their needs, the business owner said.

Due to a lack of regulations, the products that Chinese vendors sell on social media — including electronics, food products and household medical supplies such as contact lenses and solutions — cannot be inspected by Taiwanese regulators for compliance with safety standards, the business owner added.

Legal loopholes allow Chinese vendors that rely on Facebook advertising, private couriers and cash-on-delivery payment methods to bypass safety inspections, the business owner said.

The business owner called on the Executive Yuan to establish a regulatory body to oversee online transactions across national borders, as government agencies do not have the authority to deal with issues on product safety, taxation and consumer protection arising from the cross-strait flow of goods and money.

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