China Just Gave Its E-Commerce Law Teeth.
I Hope We Copy It.

A seller walked into my office

Last week a seller from China came to see me. Their product is a mobile internet dongle; their shop rating had sunk into the low 3s, and they wanted to know if there was any way to save the shop.

I looked. The problem wasn't the listing, the ads, or the algorithm — it was the product. The quality was the problem. But they blamed everything except the product: the platform, the reviews, the competition, the buyers. Everything but the thing in the box.

It's not the first time I've seen this, and I've seen where the pressure comes from.

I won't say more than that. But it's exactly why I'm glad to see regulators finally step in.

Which is what China just did

On 4 July 2026, China's market regulator and commerce ministry released the first major revision of the country's e-commerce law since 2019 — twenty provisions, open for public comment. The framing the drafters used is worth borrowing: unify, tighten, leave room. Unify the standard, so online and offline are judged the same way. Tighten the penalties — the maximum fixed fine jumps to RMB 5 million, and for serious offences, up to 5% of annual revenue. Leave room, so the rules don't strangle new technology. It reaches across platform responsibility, regulatory coordination, industry self-discipline and cross-border trade.

The sharpest example sits in pharmacy e-commerce: drug advertising will be held to one standard, online and offline. No more "the rules are looser because it's an app."

Why this is good news

Strip the country off it and look at the principle. Three things change: accountability moves onto the platform, the standard is written into law instead of left to each platform's private rulebook, and the penalty is large enough to actually deter. That protects buyers from junk and misleading deals — and it protects honest sellers from competing against a dongle priced to hit an order count, not to work.

That isn't anti-business. That's the floor a real market stands on.

Who writes the rules here

Now look at how it works on our side. On the marketplaces most Malaysian businesses live on, the platform writes the rulebook and the platform enforces it. What counts as a "misleading" price, a banned listing, a violation — it sits in a private policy that can change overnight, with the penalties (bans, throttling, delisting) handed down by the same company that wrote the rule and profits from the outcome. Referee and player are the same party. And notice what the incentives actually optimise for — volume, not value — which is how you end up with 3-star shops full of products that were never built to last.

Especially on the marketplaces

This is why I read China's move as good news, and why I hope Malaysia enforces something like it — especially on the big marketplaces such as Shopee. Not more red tape; the opposite. One clear, public standard, applied consistently, with a real path to contest a decision, and accountability that lands on the platform when it gets something wrong.

The smart part: leave room

Give China credit for the third word — leave room. Regulation that freezes technology in place is its own kind of damage. The point isn't to slow commerce; it's to make the rules legible and the referee independent. Get that balance and you protect the honest operator without punishing the innovative one.

I've written before that our regulation tends to arrive late — but lateness is a choice, and the smart move is to borrow what's already been tested elsewhere rather than relearn it slowly. China has now done a lot of that testing in the open. We can read the findings.

What I'd want here

Concretely: platform responsibility written into law, one standard for online and offline, penalties big enough to matter, and a fair, human appeal when a seller is flagged. That's not hostility to platforms — it's the difference between a market and a company town.

And to the seller with the 3-star shop: the fix was never going to be a better excuse. It was always going to be a better product.

Now or Never.

Published by IMA AI — July 2026.