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E-commerce Platforms Initiate Preemptive Self-Regulation of Health Foods

  •   14 Mar 2019
  •    Anne Peng
  •   147  Views
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    Takehome:

    • Both Tmall and JD are regulating the scope of health food and health related food products sold on their platforms. Both companies have stopped several specific types of health foods from being sold on their platform.

    China’s two ecommerce giants Tmall[1] and JD.com[2] have both taken measures to curtail the retail of certain types of health foods. JD has halted expansion in the scope of health foods sold on its own shop, citing that it has no brand expansion plan for now. Tmall halted expansion in retail of unregistered/unfiled healthcare products whose main ingredients are L-carnitine, papaya and maca. The reasons have not been specified, but we assume much of this was triggered by the 100-day crackdown[3] on illegal practice involving health related products and redirection of responsibility away from the government and towards enterprises & platforms.

    100-day campaign, 10 foci

    By March 1st, 4865 problem cases have been recorded, valued at 5bn RMB. As the deadline of the crackdown is around April 17th, there will likely be more issues reported over the next several weeks. According to a municipal SAMR department, focuses of the campaign[4] are:

    1. Fraudulent promotion
    2. False and illegal advertising
    3. Illegal use of non-food substances and claim of disease treatment functions
    4. Counterfeit and poor-quality products
    5. Business without license
    6. Illegal price
    7. Delay or refusal to meet reasonable demand of consumers
    8. Illegal direct selling and pyramid scheme
    9. Enterprises or individuals operate travel business without license
    10. Other illegal practice under the name of “healthcare”

    The above problems are frequently encountered in the market, especially on ecommerce platforms. After the Ecommerce Law[5] was enacted, platforms (not including CBEC) must have a license and must comply with Chinese national law, product standards etc.

    Changes foreseeable for health food regime

    During the concurrent two sessions (short for the second session of the 13th NPC and the second session of the 13th CPPCC), head of State Administration for Market Regulation Zhang Mao spelled out the direction of future health food supervision,[6] “our goal is to ensure enterprises’ responsibility and expand the scope of permitted claim”. The remarks point to potential changes to the registration or filing system of health foods which is said to be axed in the future.

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    ABOUT THE AUTHOR

    ChemLinked Editor

    Expertise in Chinese food regulations and import issues and with insights into the market, especially in those sectors: dairy products, baby foods, beverages, health and nutrition foods.

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