China, Balancing Risk and Reward—The Common Pitfalls to Avoid

With years of rapid growth and a huge consumer market, China is the largest player in the global online retail market. China’s e-tail market is expected to take up more than 50 percent of global retail by 2019, making it an attractive proposition for many Western brands.

Once you get past the challenges of fulfillment and are considering local language content, there are a few pitfalls to be aware of, mostly related to China’s advertising regulations. In 2015, China revised their advertising laws of 1994, making them twice as long and increasingly enforced. Since these laws have been implemented, there have been over 24,000 cases of advertising breaches with 400 million CNY (about 63 million USD) worth of fines issued.

Here are some examples of what to avoid:

Superlatives

Superlatives like “the best,” “superior,” and “the most” have been restricted in China for a while. The 2015 revisions define these more clearly than did the laws from 1994; however, there still is no official guidance on what specific words cannot be used, putting the burden on the brand to self-regulate. Overstep, and you could receive a fine up to 157,000 USD! This isn’t just a threat to Western brands. Almost instantly after launching these updated laws, a large Chinese electrical company was investigated by the Beijing Ministry of Industry and Commerce for using superlative phrases such as “the best” and “the most advanced” on its website.

Chinese Sovereignty

Several major global brands—brands that are typically known for their strong reputation and reliable attention to detail—have recently run afoul of the Chinese government and social media users for categorizing Tibet, Taiwan, and/or Hong Kong as independent countries on websites and within content for mainland China audiences. The punishments ranged from shutting down websites and apps until changes were made to forcing apologies for these transgressions.

Other Takeaways

• Celebrity endorsers can be held responsible for false claims in ads, and children under the age of ten cannot endorse products at all. Some consider this China’s approach to deterring brands from relying heavily on celebrities, traditionally a go-to move as it’s a quick way to connect with consumers who are overwhelmed by choices.
• Unsolicited advertisements cannot be sent electronically or to a private address.
• Pop-up advertisements must be able to be closed with a single mouse click.
• Advertisements for products or services which fall under the categories of medical treatment, pharmaceuticals, food plans for medical purposes, medical devices, pesticides, veterinary drugs, and health food products will need to be reviewed and approved by the relevant authorities before they can be published online.
• It is forbidden to use China's flag or anthem in any advertisements.

The aim of these regulations is to protect the public from spam and fraudulent information. As discussed, there are a range of complexities involved with launching in the Chinese marketplace. One way to mitigate this risk is by working with trustworthy language partners and in-country resources who can consult and guide you through these murky waters. Contact our Digital Marketing Group today!