It seems like the Australian companies are not prepared to face the tightening of China’s e-commerce rules and regulations as well as rules in regard to the licensing. This could severely impact the cross-border sales of the infant formula as well as vitamins. The new rules of China are expected to commence in January. The confusion is still prevailing in the mind of the Australian companies regarding e-commerce rules with respect to e-commerce sales. The top management of the Australian exporters has no idea how the fresh rules and regulations as well as licensing would work. To give them the time to comply to the new rules and regulations, Chinese President might announce a delay in the implementations of these rules and many market observers are expecting that he would be announcing this in the major trade fair which would be held in Shanghai.
The top of Shanghai-based consultancy company stated that their clients are getting worried as there are no announcements from the Chinese government with respect to the grace period extension. These clients include not only infant formula but also cosmetics as well as supplements. This consultancy company supports the companies which are planning to sell the products in the Chinese borders. The marker observers are of the view that in case the grace period extension is not granted in the time-span of 2 months, it could severely impact the Australian businesses which are having cross-border sales in China. They believe that the companies which are unable to fully comply with the fresh Chinese regulations might now wake up as the export to the Chinese region would be shut down until they meet the criteria and rules which have been placed by China.
China’s National People Congress has made an announcement regarding the plans in the month of August revolving around the tightening of the cross-border e-commerce sales. However, they did not furnish proper details. The new rules and regulations which have been made so that the consumers can get greater protection primarily apply to vitamin supplements, dairy as well as cosmetics which are sold out in China with the help of e-commerce channels. However, implications with respect to the personal shopper networks are also there because they would be highly regulated as well as they would be subject to taxes which could severely impact the profit margins.
The key official of the leading Australian exporter believes that fresh regulations might end up having more strict tax collection or filling the forms to get the products registered. Moreover, the harshest scenario is that the products need to be developed or the production has to be done in the Chinese government-registered facility. Austrade has stated that fresh regulations span across the topics which include e-commerce promotion, intellectual property protection, contracts and dispute resolution, consumer rights as well as packing and waste management. They also stated that the merchants which are in the business of selling the goods via online platform in China need to register so that they can get the online selling certificate.
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