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GBA consumer rights to the fore

By Alex Liu

Hong Kong, 6 November 2023: Cross-border consumer protection has become a key focus for regulators as the development of the Greater Bay Area (GBA) gathers pace. Setting minimum standards for the purchase of goods and services and providing the public with channels to resolve complaints are seen as essential to boosting confidence in the multi-jurisdiction economic hub.

To this end, the Consumer Council has just hosted a forum – the first of its kind in Hong Kong – bringing together almost 100 delegates from consumer rights organisations across the GBA. The gathering signals a strong desire for closer co-operation between the different authorities.

In his welcoming remarks, Secretary for Commerce and Economic Development Algernon Yau noted that “strengthening consumer confidence and safeguarding consumer rights are essential for boosting the economy”. He expects the authorities in Hong Kong, Macau and Guangdong to step up collaboration with regard to good trade practices and consumer education.

While deliberating general strategies for safeguarding consumer rights, the forum focused on four particular areas of concern:

1. Livestreaming e-commerce

This modern phenomenon, in which online influencers sell discounted products to legions of fans, has become deeply entrenched in Chinese social media. The market for livestreaming e-commerce was more than RMB 1.2 trillion in 2021, according to Chinese consultancy iResearch, which predicts the market will grow by 1.8 times by 2025. The sector is fast evolving, with computer-generated sellers replacing their human counterparts and short video apps entering the fray, and presents regulators with unique challenges. Product return levels are notably high.

2. Safeguarding the quality of goods

Last April, Hong Kong’s Trade and Industry Department and its counterparts in Macau and Guangdong signed a Memorandum of Understanding on jointly promoting “GBA Standards”, a new brand designed to improve product and service quality. The list so far covers 110 items in a range of sectors including food, transportation, mechanical and electrical products, medical care and education. While the GBA Standards initiative remains non-compulsory, authorities believe manufacturers and service providers will see the benefits of joining.

3. Cross-boundary property purchases

Two years ago, the Consumer Council produced a comprehensive report outlining the pitfalls of buying residential property outside Hong Kong, noting especially the growing trend of Hongkongers purchasing houses and flats in the mainland. After analysing more than 260 complaints, studying some 1,300 advertisements and making site visits, the report writers concluded there was “much room for improvement” in the regulation of this industry sector.

The report highlighted several key areas of concern, including: lack of licensing requirements for certain estate agents and vendors; no cooling-off period for deposits or reservation fees, while deposit protection mechanisms were not in place; insufficient regulation of advertisements; and insufficient regulation of other trade practices.

4. Consumer education for persons with special needs

The Consumer Council has previously warned of rogue service providers – especially in the fitness and beauty industries – targeting vulnerable citizens and luring them into signing contracts. It has launched a programme, with the assistance of NGOs, to help disadvantaged groups be more alert and avoid common sales traps. The programme includes teaching manuals and workshops to strengthen awareness of unscrupulous business practices.

In addressing the forum, Consumer Council Chairman Clement Chan pointed out that the GBA’s “one-hour living circle” sees residents frequently cross borders for work or leisure and that consumption behaviours are no longer localised. Hence the need, he insisted, “to foster a safer and more secure consumption environment across the GBA”.

To recap, the GBA is a hugely ambitious and visionary concept. Beijing intends to turn the area – which includes Hong Kong, Macau and nine cities in Guangdong province – into a global economic powerhouse. Its total population is over 86 million while its GDP was more than RMB 13 trillion in 2022. The Consumer Council’s forum was another reminder that while the GBA has vast potential, cross-border co-operation and robust regulatory regimes are crucial to its growth.

Alex Liu is Managing Partner of BC&C. His key areas of practice include commercial and corporate litigation, investigations by governmental bodies such as the SFC, ICAC and Commercial Crime Bureau, insolvency and debt restructuring, intellectual property and employment matters. He can be contacted at alex@boasecohencollins.com.

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