By Sidney Qin and Yang Xiaoli  King & Wood Mallesons’ Compliance Group

Overview: Promoting products or services by advertising and other forms of propaganda (“Advertising Behavior”) has always being crucial for emerging retail brands to build their brand image, increase sales and secure market share. It is not rare for authorities in China to challenge retailers for improper Advertising Behavior, but how many of the retail market players have bothered to watch their steps in the various ways of conducting advertisements and propaganda in China?

Given that the rules governing Advertising Behavior are scattered in different laws and regulations, retailers in China, especially multinational retail brands, always find it difficult to see the whole picture of what they ought to do or not to do and where they may cross the line. The following Dos and Don’ts, which are summarized based on detailed requirements under the various relevant PRC laws and regulations and developed from our previous experience, could be of some helpful guidance for retailers in China:

Dos:

(1) Ensure the contents of your advertisements are true, accurate, lawful, authentic, clearly indicated, definite and recognizable as an advertisement;

(2) use formal, standard language, use Chinese as the primary language and foreign languages as the secondary language;

(3) be ready to provide reasonable bases for the advertising claims before they are disseminated; and

(4) obtain prior approval from up-stream sellers for the use of any information or description of their products.

Don’ts:

(1) Avoid making false or misleading advertisements, including any of the following behaviors:

  • Deceive the consumers with non-existent facts
  • Exaggerate the content of the advertisement so as to make them inconsistent with the facts
  • Deliberately omitting key information in representations or when quoting supporting evidence
  • Using ambiguous language
  • Publishing advertisements in the form of news reports, or expert and consumer interviews
  • Fail to provide appropriate reference objects
  • Making false propaganda on commodity prices and market information and damaging the interests of competitors
  • Making direct comparisons with competitors’ products in the form of commercial defamation
  • Plagiarizing or imitating a competitor‘s advertising
  

(2) Do not include any content that is expressly prohibited by law in your advertisement, such as (i) words indicating something is of national level, the highest grade or the best, (ii) the national flag, national emblem or national anthem and (iii) contents that compromise public order or social customs.

                                     

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Email Address: compliance@cn.kwm.com