Anyone who’s surfed China’s websites will wonder why even the most unlikely seafood products seem to come from France. Vendors on business to consumer (B2C) and Consumer to Consumer (C2C) websites falsely label seafood such as sable fish, cod and salmon (and other food products) as French because of the assumed cachet the French name gives – and the chances to charge premium prices.
Another advertising ruse favored by Chinese seafood vendors is health benefits: everything from cod to crab to oysters has been marketed in China as being specifically for the health improvement of babies, pregnant women, old people and men suffering from erectile dysfunction. Scientific evidence is rarely provided to back these claims.
But all this may change this September with the coming into force of China's new advertising law. It criminalizes the use of claims and data in advertising which haven’t been independently verified. Unlike the 1995 law it replaces, the new advertising law offers a clear definition of false advertising.
This could have a big impact on booming online sales of imported seafood – though regulators have been particularly keen to target vendors of health food, medicine and tobacco. Another clause in the new law bars the use of email and mobile spam to promote online sales.
The new law will hopefully standardize online sales, but it shouldn’t damage this new and fast-growing market. Chinese consumers like online shopping for its convenience, good value and variety. However, the quality of goods sold online has suffered from the lack of an up-to-date regulatory regime. Several online retailers have lost repeat purchases and consumers’ confidence due to knowingly or unknowingly hosting inaccurately advertised goods. This hurts the brands who pay to be listed and promoted on the e-commerce sites.
The new law should weed out the cowboys and help the long-term development of online retailing of food, which is booming in China with the development of B2C online shopping websites such as Yihaodian.com, Vipshop.com, JD.com and a growing band of specialty online retail websites.
Key seafood brands like CP and Guolian have adapted to online sales in China by opening official flagship stores on websites like Tmall and JD.com. Some also have their own official online shopping site. This year many more international and domestic brands are expected to spend more time and money in developing their online channels in order to increase their sales revenue.
Chinese advertisers’ overuse of endorsers will also be curbed: a spokesperson may not recommend products or services he or she has not used themselves – a stipulation which will impact major domestic seafood brands, which have been engaging pop stars and celebrities to endorse new product lines as they seek to tap the domestic market.
What’s driving online commerce is the prevalence of smartphones in China – that helps explain why 461 million people are shopping online compared to 47 million in 2007. Under the new law the Administration for Industry and Commerce (AIC), which is tasked with supervising the advertising law, will have the power to inspect premises of offending companies and to question executives.
At USD 453 billion (EUR 412 billion), e-commerce represents 11 percent of all retail sales in China, but online figures look very strong next to average growth in traditional retail sales. China’s retail sales grew only 10 percent in April and 11 percent in May, some way off the peaks of 15 percent seen at the same period in 2011 and 2012. At the same time online retail sales from January to March were up 41.3 percent year-on-year. Online transactions are going to matter more and more for sales of seafood in China, but vendors will have to learn to be more honest in their marketing. Expect to see less French sable fish on Chinese websites this autumn.
