Following a wave of online anti-monopoly by the Communist Party of China’s top brass, Chinese regulators on Tuesday proposed regulations on the popular “community group-buying” business, stating that e-commerce platforms should not enter into monopoly agreements or abuse their pricing power.
China’s State Administration of Market Regulation and Ministry of Commerce held an administrative guidance meeting on the same day, with six e-commerce companies including Jingdong, Meituan and Alibaba attending.
The meeting pointed out that in order to regulate the community group purchase business, the authorities require these enterprises to strictly comply with the “nine prohibitions”, including not to abuse their pricing power through low price dumping and price collusion; not to enter into any monopoly agreement; not to illegally collect and use consumers’ personal information; and not to sell counterfeit and shoddy goods, etc.
Community group buying is an e-commerce model in which community residents buy products at low prices through local group buying organizations. The major e-commerce giants see the business opportunity and use various subsidies and discount strategies to drive down the selling price and seize the market. There are concerns that this may take away the business of vegetable stalls and mini-markets.
Recent Comments