Beijing online merchants are required to have business licenses?

August 1st, 2008

Apparently, starting from August 1st online merchants in Beijing are required to have business licenses to continue selling on the Internet. It will be interesting to see how this plays out because there has been a lot of debate and resistance to this new requirement – according to this news article as of July 31st not a single online merchant has applied for the required license. Online commerce websites such as TaoBao also have not added any new verification features to ensure that merchants have the requisite business license.

88% of the respondents to an informal online survey on Sina.com do not support this new business license requirement. 86% of the respondents think that this new requirement will have a negative impact on the growth of online commerce in China.

According to the Zhongguancun Department of Commercial Affairs, to apply for the license, online merchants will need to present their property ownership certificate (?), personal identification card and temporary residence registration.

We’ll see what happens in the next few weeks/months:

Will this new requirement be postponed or cancelled due to strong opposition from Chinese Internet users and websites? Beijing is supposed to be a testing ground before a nationwide rollout of this new requirement.
Will the government will enforce this new requirement (which will conveniently also make it easier for them to collect taxes on online transactions), to the detriment of China’s fledging online marketplace? A lot of small/casual sellers may be driven away due to the hassles involved in getting and maintaining a license.

http://tech.sina.com.cn/focus/wdxg08/index.shtml
http://business.sohu.com/20080801/n258521239.shtml
http://news.ctocio.com.cn/72/8240072.shtml