China: China’s revised consumer rights protection law raises the bar for both bricks and mortar retailers and online retailers

Last Updated: 5 May 2015
Article by Richard Wigley

China is now believed to be the world's largest online marketplace 1 , as well as quickly gaining on the U.S. as the country with the largest overall retail marketplace 2 . This growing retail marketplace, both for traditional "bricks and mortar" retailers as well as online retailers, presents both great opportunities and challenges. Chinese consumers are becoming increasingly demanding in terms of product quality, as well as at the same time increasingly transitioning from being traditional "bricks and mortar" retail consumers to online shoppers. These consumers have demanded certain protections when making purchases and, as expected, have often resorted to administrative authorities or the Chinese judicial system to seek protections of their rights, as well as compensation where appropriate.

In response to this changing consumer retail landscape, the Standing Committee of the National People's Congress recently promulgated a Revision to the Consumer Rights Protection Law of the People's Republic of China3 (the Revision), where the Revision is to become effective on March 15, 2014. While the Revision affords additional protections to Chinese consumers, the focus of this analysis is upon how the Revision, in effect, "raises the bar" on retailers in China, in terms of their new or revised statutory obligations under the Revision, as well as potential increased liabilities should they be found to be offering products or services of inferior quality. Specific provisions of interest shall be examined, as follows.

Requirements for the "return" process

For online retailers, Article 25 of the Revision stipulates that goods may be returned within seven days from the date of receipt of the goods (without requiring the specifying of a reason) and, if so, the full price refunded. 4 There are exceptions for certain types of goods (including custom-made goods, perishable goods, software downloads, and newspaper/ periodicals), but any goods returned must be in "good condition". 5 The "shipping expenses for returned goods shall be borne by the consumer; [but] where there is an agreement between the business operator and the consumer, such agreement shall prevail." 6 As such, except for those products not protected, online consumers will have a seven-day period to evaluate the product and if they deem it, for whatever reason, unacceptable, they can return the product, at their expense, to the online retailer.

This raises the question of what is "good" condition upon return where, for instance, an article of clothing was worn a single time, then returned within seven days. What about a pair of shoes which were worn a single time, but exhibited normal wear? Article 25 notes, however, that the non-return of certain goods may be recognized if the consumer, based on the "nature of the goods", confirms at the time of purchase that such non-return is applicable. 7 Administrative and judicial authorities will have to further define such conditions. Online retailers can, of course, provide more liberal return policies at their discretion, such as longer return timeframes and/or free/supplemented return shipping. However, as Article 26 notes that retailers cannot through sales contracts use "standard clauses" to "restrict consumers' rights" 8 , online retailers would not be able to, for instance, contractually restrict the return period below seven days where the goods do not fall into one of the "exception" categories or by the specifi c "nature of the goods". 9

Regarding return requirements for traditional retailers, under Article 24, a similar seven-day return period is defined, though the business operator may, under certain circumstances, be required to "bear the requisite transportation expenses, etc."10 It should be noted that Article 23 defines a six-month return period for defective durable goods (such as a "motor vehicle, computer, television, refrigerator, air conditioner, washing machine, etc.") or "renovation services", and where the consumer has six months from receipt of the goods or services to seek repair/replacement and where "the business operator shall bear the burden of proof pertaining to the defect".11 While durable goods often have a warranty period of six months or more, under the Revision they will clearly bear the burden of proving the good not defective. For many durable goods manufacturers/retailers, this six-month return period should not result in an additional burden. However, where this new statute may actually raise a signifi cant number of disputes is in its providing additional consumer protection for "renovation services". Such services are, by their nature, rife with issues relating to consumer satisfaction and the Revision provides a basis upon which complaints may be lodged within six month of the renovation.

Requirements for protecting consumer information

The stipulations under Article 2912 as they relate to online retailers are similar to those included in the Decision on Strengthening Online Information Protection ("Decision"), as adopted on December 28, 201213, though the Decision goes into much greater detail. However, the Revision applies to all business operators, including "bricks and mortar" retailers. As such, all retailers "must keep strict confidentiality of personal information of consumers collected by them" and, furthermore, "shall not send commercial information to consumers without their consent or request or when a consumer has explicitly rejected".14

Compensation liabilities for online trading platforms

The Revision contains the stipulation in Article 44 that if a consumer seeks compensation in relation to a defective good/service purchased through an online trading platform, said platform will be liable for the compensation if it "is unable to provide the true name, address and valid contact method of the seller or the service provider, the consumer may seek compensation from the online trading platform provider."15 However, said Article further states that "the online platform shall have the right to recover the compensation from the seller or service provider."16 As such, this places a real burden on such platforms to ensure that their seller/provider information is current and valid.

In addition, Article 44 stipulates that online trading platform providers should bear joint and several liability where there are or "should be aware that the seller or the service provider is using its platform to harm the legitimate consumer rights and interests, but failed to adopt the requisite measures..."17 Though such joint and several liability is addressed under various other PRC laws for infringements online, the Revision does, under Article 44, specify those infringements carried out on online trading platforms, and, as such, placing upon them a specific burden to "adopt requisite measures".

The rise of Chinese consumer associations and "public interest" litigation

Under Article 47 it is stipulated that "for acts which harm the legitimate interests of many consumers, the China Consumers' Association (CCA) and consumer associations" either established on the provincial level or "centrallyadministered municipalities" shall be able to bring suit before a People's Court.18 A recent revision to the Civil Procedure Law of the PRC (Civil Procedure Law) allows for such organizations to bring such suits where Article 55 therein states that "[f]or conduct that pollutes environment, infringes upon the lawful rights and interests of vast numbers of consumers or otherwise damages the public interest, an authority or relevant organization as prescribed by law may institute an action in a "People's Court."19 Such public interest litigation amounts to a variant of the "class-action" lawsuits as seen in foreign jurisdictions, but to date not prevalent in China. As recently noted by Zhang Jinxian, a senior Supreme People's Court (SPC) Judge, "public interest litigation is very new to Chinese courts. We have only a general description in laws instead of applicable judicial procedure."20 Judge Zhang further noted, however, that guidelines for judges in such cases are in development and that the SPC intends to work with the CCA to develop such guidelines.21

Whereas the current rise in consumer products litigation in China is driven by a variety of factors22, it would appear that the CCA will play a much greater role going forward in relation to claims brought by large numbers of consumers who all have claims regarding the same specific alleged defective products. With the ability of the CCA to now file such "public interest" lawsuits under the Civil Procedure Law and with the provision under the Revision stipulating the CCA's role in bringing such suits, it is clear that once guidelines are developed in conjunction with the SPC, it is likely that, in due time, many online and traditional businesses in China will be faced with their first "class action"-type lawsuits.

Fines, penalties, and damages compensation guidelines

In terms of administrative penalties, under Article 56 the maximum fine has been increased from 10,000 RMB to 500,000 RMB23 and, those business operators who offer defective products/services could, in addition to the existing possibility of being "ordered to suspend business operations" and having its "business license ... revoked", would now face the possibility of being "blacklisted in the creditworthiness files by the agencies imposing punishment and announced to the public."24 Furthermore, Article 57 stipulates that criminal liability may apply, where appropriate, though criminal liability for selling certain defective/substandard products already existed under the Criminal Law of the PRC25.

The definition of what constitutes damages is, under Article 51 of the Revision, expanded to included "mental anguish".26 Furthermore, under Article 55, damages compensation for fraudulent sales "shall be three times the amount of the price of the goods purchased by the consumer or the fee of service received by the consumer...."27 In addition, where the goods/ services provided "cause death or severe health damages of consumers or aggrieved persons", the damaged party shall have the "right to demand punitive damages of not more than two times the amount of losses."28 Punitive damages have been allowed under the Tort Liability Law of the PRC29, but the Revision provides the courts with guidance for such damage awards. Put these more liberal/generous damages guidelines together with the possibility of "public interest" lawsuits brought by the CCA on behalf of many consumers and this amounts to significantly enhanced legal risks going forward for certain companies which offer defective products and/or services.

In summary, the Revision not only provides additional protection for consumers in China, but it also places additional requirements upon both online and traditional retailers. With the stipulations of the Revision requiring that retailers allow consumers to return products (with the relevant stipulations), and placing substantially stiffer penalties/liabilities upon those retailers who do not comply with the various requirements of the Revision, the Revision indeed "raises the bar" for retailers and should help ensure adequate consumer rights protection in China.


1 Serge Hoffman and Bruno Lannes, Bain & Company, China's e-commerce prize, 1 (citing China Statistics Bureau and U.S. Department of Commerce) (2013) found at e-commerce_prize.pdf (last visited November 7, 2013).
2 He Shan,, China becomes world's 2nd largest retail market, July 5, 2013, found at http://www. (last visited November 7, 2013).
3 National People's Congress of the People's Republic of China, Decision of the Standing Committee of the National People's Congress on Revision of the Consumer Rights Protection Law of the People's Republic of China, as promulgated on October 25, 2013, effective March 15, 2014.
4 Id. at Art. 25.
5 Id .
6 Id .
7 Id .
8 Id. at Art. 26.
9 Id. at Art. 25
10Id. at Art. 24.
11Id. at Art. 23.
12Id. at Art. 29.
13National People's Congress of the People's Republic of China, Decision on Strengthening Online Information Protection, as adopted on December 28, 2012.
14Supra 3 at Art. 29.
15Id. at Art. 44.
18Id. at Art. 47
19National People's Congress of the People's Republic of China, Civil Procedure Law of the People's Republic of China, Art. 55, as amended on August 31, 2012.
20Xinhua News Agency, Senior judge anticipates public interest litigation precedents, Global Times, October 30, 2013, found at (last visited November 7, 2013).
22Zhou Wenting, China Daily, Court: Cases by consumer rights fighters rise, March 3, 2012, found at (last visited November 7, 2013).
23Id. at Art. 56.
25National People's Congress of the People's Republic of China, Criminal Law of the People's Republic of China, Articles 149-50, adopted on July 1, 1979, revised on March 14, 1997 and effective October 1, 1997.
26Supra 3 at Art. 51. Art. 55.
29National People's Congress of the People's Republic of China, Tort Liability Law of the People's Republic of China, Art. 47, as promulgated on December 26, 2009 and effective July 1, 2010.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions