Digital Marketing and Compliance in the PRC

In China, the word “advertisement” has a very broad meaning. Any content that directly or indirectly introduces goods or services marketed by commodity dealers or service providers to the public, could be deemed as an advertisement, no matter what form it takes or where the content is published.  

With the development of interactive social platforms, such as Facebook, Twitter, Instagram and TikTok internationally, and wechat, Microblog, Red Book (小红书), Douyin and Kuaishou in China, digital ads frequently feature key opinion leaders (KOLs) endorsing their "favourite" products. These KOLs share their personal experience of using certain commodities or services and because they have a large number of followers on these social platforms - and because these followers regard them as convincing and trustworthy - these ads tend to have quite a high “conversion rate”. Under PRC advertising law, such KOLs might be regarded as “endorsers”.

In web 3.0 age, it is feasible to collect and analyse data such as users' searches, browsing, clicking, purchasing and sharing, to put together a "user portrait" of each customer. This helps companies accurately understand users' needs and preferences, and makes marketing activities more centralised and efficient, enabling brands to target specific users. By employing the “user portrait” technique, digital ads can be sent to targeted groups who are more likely to be interested in - and to buy - the commodities advertised.

The Chinese government imposes strict compliance requirements on commodity sellers and the related parties involved in their ads. There are some prohibition rules that the parties need to be aware of. Firstly, “national”, “highest”, “best” or similar comparative words are prohibited in ads. Secondly, some commodities and services may not be advertised, for example, narcotic drugs, psychotropic drugs, toxic drugs for medical use, radioactive drugs, and other identified drugs, as well as drugs, medical instruments and treatment methods used in rehabilitation.  

Another concept to be aware of is false advertising. Government penalties for false advertising are high and may be imposed on various parties, including the advertiser, the advertising agent and the advertising publisher. For commodities that concern customers’ life and health, such as foods, beverages or dietary supplements, the advertiser will assume tort liability for the infringement, and the advertising agent, advertising publisher and the endorser will assume joint and several liability along with the advertiser. For other type of commodities, the advertising agent, advertising publisher and the endorser only assume joint and several liability if they knew, or should have known, that the advertisement was false. 

Law firms specialised in advertising law can: