A Game Changer for E-Commerce: China's Cross-Border Data Transfer Evolution

On March 22nd, the Cyberspace Administration of China (“CAC”), the data security and privacy law supervisor authority in China, released a long-awaited rule on cross-border data transfer, this is a big change in China's rules for data that crosses borders. This change is quite important for e-commerce and marketing companies who do business in China.

First, you may ask what is cross-border data transfer? To put it simply, it is when information moves from inside China to outside China. This can be customer information, financial data, or other types of data any company may collects.

So before March 22nd, China had very strict rules aka “Data Outbound Rules” and “PI Outbound Rules”, companies needed to do a security assessment and get government approval each time they wanted to send data outside China. This made things rather difficult and slow.

So now, the CAC has eased the rules, announcing that many common types of data transfers are now exempt from the strict process. This includes data for:

• International business transactions
• Cross-border transportation and travel
• Cross-border manufacturing
• Marketing campaigns

As long as the data doesn't contain personal information of Chinese citizens or "important" data related to national security, companies can transfer it much more easily now. This is a big change and let me explain why:

For any e-commerce companies, data is essential. We need it to analyze customer behavior, preferences, and transactions to improve shopping experience and target marketing effectively. And the previous data transfer restrictions made this quite challenging and harder to gain insights and adapt quickly.

Now, under the new rules, most of this e-commerce data will likely be exempt from the strict transfer process. As long as it doesn't contain sensitive personal information, any company can send the data back to their headquarters much more easily for analysis and use in optimizing the business.

For example, when a Chinese customer orders a product from let's say a French website, the order and shipping data needs to flow from China to France and back. Previously, this cross-border data transfer faced many compliance roadblocks. Now, it will be much smoother, allowing faster order processing and overall better customer experience.

Additionally, the new rules specifically exempt data for the performance of cross-border e-commerce contracts, as long as transferring the data is necessary to fulfill the contract. This gives clear permission for the data flows integral to cross-border online retail.

What does this mean for marketers? You can now analyze customer data and run marketing campaigns without so many hurdles. This new policy shows China wants to encourage international business and make things easier for foreign companies. It's quite a positive development.

Of course, companies still need to be extra careful about personal data and sensitive information. But for most common data transfers, it will now be much faster and simpler.

Again this is a game changer for any company doing e-commerce or marketing in China.

Disclaimer: Opinions are my own and not the views of my employer.