Online shops facing registration, taxation
- Source: Global Times
- [07:54 February 01 2010]
- Comments
Lan Jiang, a 26-year-old doctoral student at Beihang University in Beijing is one. He said he has bought "almost everything"online, including snacks, sneakers, jeans, an mp3 player, and cell phones for about a year and hasn't run into any fraud problems.
Lan noted that his only unsatisfactory purchase was a jacket he bought on Taobao, China's largest web shopping platform, that had a hole in the back but after he complained the dealer refunded his money and recalled all the jackets.
Taobao sales totaled 200 billion yuan ($29.3 billion) last year, or twofold from 99.6 billion yuan ($14.6) in 2008.
"Web shopping is safer and cheaper than buying from brick-and-mortar shops,"said Lan, "because prices and business reputation of web stores are so transparent I can easily find what I want at a reasonable price after comparing a bunch of similar shops."
"And most usually I would a shop that has a large number of transactions on record and excellent buyer feedback."
Protecting reputation
"I take care of my shop like my baby because reputation is so important to a web store,"said Li Yili, a former IT engineer in her late 20s who runs a cosmetics shop on Taobao. "No one would buy from me if I cheated them."
But despite current regulations, fraud is still commonplace in the real world where every shop is registered with the government, said Yang Bo, an e-commerce researcher with Renmin University of China.
Yang said that the punishment for fraud is too mild (about 10 times the price of what is paid) and suggested that any business found to be fraudulent should be shut down.
"We need a real hearing, not a show hearing on the draft when it is done, so various voices would be heard, and we can have a policy that is good for the market and consumers and acceptable for web stores, "said Yang.
Higher prices feared
However, some worry that the registration and taxation may hurt and even restrain the still maturing web shopping market.
Retail sales amounted to only about 2 percent of total retail sales of consumer goods in 2009, though the online retail sales grew 94 percent in the year to total 250 billion yuan ($36.6 billion), according to China Internet Network Information Center.
The web shopping market could be hurt by the registration policy, said the Beijing-based analyst, because the low profit margin of on-line stores may not be able to afford the taxation.
"I would not even have started my web shop if I had known I would be asked to register it,"said
Qi Mei, a self-employed graduate from Central University of Finance and Economics who started her online clothing shop from high school.
She said her profit margin in cyber space is already low.
"I would not be happy if the web stores are to be taxed, because the stuff would no longer be cheap by then, while the low price is a big reason I go shopping on line,"said online shopping fan Lan.
"The buyer would definitely pay the bill if we are taxed, because our prices would be raised accordingly,"said Chen Rongqin, who sells sportswear on Taobao.
"But I believe taxation of web stores will come sooner or later,"she added.
