The government is opening up China's booming e-commerce sector
Beijing is taking steps to open up China's closely regulated online marketplace. Previously foreign companies were prevented from owning multi-merchant online retail platforms, like Alibaba's Taobao.com, but will now be able to own "online data process and e-business transaction" businesses, provided they are registered in Shanghai's Free Trade Zone.
While foreign companies have long been able to sell direct to consumers and own up to a 50% stake in multi-merchant e-commerce company, the new policy will allow foreign firms greater flexibility in the sector. For example, a foreign lubricants retailer could open a website that allowed distributors to operate under its banner, delivering quality and assurance to customers.
According to the Ministry of Industry and Information Technology, non-domestic companies will also enter "telecom value-added services" space.
Companies, like Asos and Amazon, looking to operate in this space had until now used a series of legal structures, such as "Variable Interest Entities", to acheive their goal. Now they will be able to retail online with greater transparency.