E-commerce is China’s largest consumer sales platform. But growing concerns about privacy and fraud are stifling the industry and causing hesitation among consumers. So China’s government and the industries largest players have teamed up to fight fraud and improve e-commerce’s credibility.

China’s largest Internet companies vowed to share information and cooperate to fight online fraud, highlighting a developmental difficulty facing China’s fast-growing e-commerce market.

The companies—including Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Baidu Inc. BIDU and 18 others—established an e-commerce protection framework under the guidance of China’s Ministry of Public Security, according to a statement posted by Alibaba.

The agreement marks new involvement by the government and rare cooperation among China’s biggest Internet companies to clamp down on a problem that has hit China’s e-commerce market particularly hard. Common scams involve posting fake ads to draw unsuspecting consumers, selling shoddy knockoffs or accepting payments for products that are never delivered.

E-commerce has exploded in China in recent years, and some analysts say the growth has outpaced by the abilities of companies and the government to regulate and support the industry. The industry also faces difficulties delivering an ever-greater number of goods across the vast country.

China’s total online sales are expected to rise to $356.1 billion in 2016 from $169.4 billion last year, according to Forrester Research. U.S. online retail sales meanwhile are forecast to rise to $327 billion from $226 billion.

Many Asian consumers, especially in China, don’t have high levels of confidence in e-commerce transactions. Which is why one of leading Chinese payment provider Alipay’s key innovations was the practice of holding funds in escrow until both parties are satisfied. Overcoming these fears, and convincing often-skeptical customers to pre-purchase products (i.e. products that haven’t even perhaps been manufactured yet) will be key for any aspiring Asian retailers.






Notice in this study, one of the main reasons a consumer did NOT buy online was worries about credibility of seller and quality of products. The new e-commerce agreement aims to quell those concerns. See the rest of this info graphic here.

Read more on this new agreement from the Wall Street Journal here.