Recently, in order to regulate the business activities of mystery boxes in the city, protect the legitimate rights and interests of consumers and safeguard the public interest, the Shanghai Administration for Market Regulation has formulated and released the Compliance Guidelines for Business Activities of Mystery Boxes in Shanghai. Details as follows:

Mystery box business activity refers to the business model in which the operator sells a specific range of goods (including services) in a randomly selected manner by the consumer without prior notification of the specific model, style or service content and delivery method of the goods, including the Internet, physical stores, vending machines and other forms of sales.

• Red line for mystery box business

Mystery box business activities should be in line with the relevant laws and regulations, the scopes of business are generally in the areas of consumer life, arts and entertainment. Goods that are clearly prohibited for sale and circulation by law and regulations shall not be sold in the form of mystery boxes.

For goods with strict requirements for sales qualification, storage and transportation, and conditions of use, they shall not be sold in the form of mystery boxes, such as special foods, drugs, medical devices, toxic and hazardous substances, flammable and explosive substances, live animals, etc.

• Compliance advice

(1) Regulate the price system

The actual value of the goods in the mystery box should be basically equivalent to its selling price, and the selling price of a single mystery box should generally not exceed RMB 200 Yuan. Raise the price of ordinary goods in the form of mystery boxes is prohibited.

(2) Clarify the rules of mystery box selection

Mystery box operators should publicize the type of goods, the rules for drawing boxes, the number of goods placed, the probability of selecting hidden models and other information to fully inform consumers, and keep a complete record of the probability setting, selection results, and distribution for inspection.

(3) Encourage to set a bottom-up mechanism

Encourage mystery box operators to publicize the criteria, when the same consumer is extracting the same series of mystery box goods to pay up to the amount or extract a certain number of times, to provide a reasonable way to make it possible to obtain hidden models of goods or the entire series of goods. However, it is not a mandatory requirement.

(4) Strengthen the after-sales protection of goods

Mystery box operators are required to establish a convenient and effective complaint handling mechanism, public complaints, processing procedures, return and exchange standards, and shall not shirk, delay or refuse to deal with consumer complaints.

(5) Regulate marketing hype behavior

Mystery box operators are required not to carry out financial-related marketing, there shall be no intervention in the secondary market of market-making behavior, not to carry out sky-high speculation, excessive marketing or hunger marketing.

(6) Minors protection

Require mystery box operators not to sell mystery boxes to minors under the age of 8. Sales of mystery box goods to minors over 8 years of age should be confirmed by different means, such as online and offline, with the consent of their guardians.

If you want to read the complete article, you can refer to the below link (in Chinese only):   http://www.shanghaiinvest.com/cn/viewfile.php?id=17190

If you have any question, please contact me. 

Mr. Mike Chang (Partner)

TEL: 0086-21-68868321

Email: mikechang@shanghaiinvest.com