The fourth meeting of the internet law enforcement collaboration and governance mechanism, themed “Building Connectivity Together, Compliance for Long-term Success: Dual Drivers for Ecological Development of Direct Selling Enterprises and E-commerce Platforms,” was held on July 2 at the Shanghai Municipal Market Supervision and Administration Law Enforcement Corps. During the meeting, representatives from five direct-selling enterprises and five internet platform companies in Shanghai jointly signed a Cooperation Memorandum, exploring deeper business collaboration to achieve mutual benefits and a win-win outcome.
The Cooperation Memorandum primarily covers three areas: safeguarding authentic products in Shanghai, protecting consumer rights, and opposing “low-price internal competition” in the direct-selling sector.
In recent years, counterfeit direct-selling products masquerading as e-commerce goods and malicious defamation of direct-selling brands—collectively termed “black industry practices” in direct selling—have not only disrupted the industry’s operational order and damaged corporate reputations but also infringed on consumers’ legitimate rights. Addressing these concerns requires fostering dialogue between e-commerce platforms and direct-selling enterprises to raise awareness of the harm caused by such practices, presenting a new challenge for both industries.
Through the existing framework of the internet law enforcement collaboration mechanism under the Shanghai Municipal Market Supervision and Administration, the two-way communication between direct-selling enterprises and e-commerce platforms has been strengthened, resolving communication barriers and alleviating key compliance concerns in the direct-selling industry. Under the guidance of Shanghai’s market regulators, 277 e-commerce stores involved in illegal “black industry practices” have been shut down, with 4,970 product listings removed, reinforcing internal compliance measures on e-commerce platforms to protect the legitimate interests of direct-selling enterprises.
An official from the Shanghai Municipal Market Supervision and Administration stated that this memorandum marks the beginning of collaboration between the direct-selling industry and e-commerce platforms. With regulatory support, Shanghai is leading nationwide efforts to create a standardized and dynamic e-commerce ecosystem. So far, six direct-selling enterprises in Shanghai have established 18 official e-commerce platform accounts, further strengthening brand development.
Moving forward, direct-selling enterprises and e-commerce platforms in Shanghai will deepen their exploration of information-sharing and coordination mechanisms, appoint dedicated personnel for regular and ad-hoc interactions, and establish normalized communication channels. Meanwhile, direct-selling companies will expand partnerships with e-commerce platforms, leveraging platform traffic and technology to revitalize their business operations.
