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China Drafts Rules to Regulate Live-streaming Sales Industry

November 13, 2020 10:50 pm

Beijing (PingWest)- The Cyberspace Administration of China (CAC) has drafted rules to regulate the country’s booming livestreaming industry, strengthening scrutiny live-streaming platform belonging to e-commerce giant such as Alibaba Group and JD.com

 Tapping into live streaming has become a hot trend in China this year as more merchants and international brands found ways to interact with the Chinese shopping through live-streaming channels. Most Chinese e-commerce platform now offer the service to purchase and sell products via livestreaming.  

Corporate CEO, celebrities, government officials all present their sales pitches to live audiences through live-streaming.

Gree Electric Appliances chairwoman Dong Mingzhu sold CNY310 million of goods in her second-commerce livestream event on short video platform Kuaishou on May 10, while Ding Lei, founder and chief executive of gaming giant NetEase, generated CNY72 million in sales after a live-streaming show on Kuaishou this month.

Top livestreaming like ipstick king” Li Jiaqi and Viya can sell products worth millions of yuan in a single livestreaming session on platforms such as Alibaba’s Taobao, ByteDance’s Douyin and Kuaishou.

But the industry has also been facing challenges as Chinese shoppers complained about fake advertisement and sales on low quality products presented by live streamers.

Many livestreamers have used exaggerated or even false advertisement to boost product sales as they endorse third party products and service for a fee.

However, the problem will be solved soon under the drafted rules, CAC will required livestreamers to provide their real name identification to the livestreaming platform they contracted with. then the platforms will need to submit regular reports on livestreamers to local authorities.

Not only the livestreaming platforms will need to surprise the registration of each livestreaming, and livestreamers will be at least 16 years old to be qualified for the job unless they obtain consent from their legal guardian.

In June, The China Advertising Association (CAA) also issued a notice urging content censorship and real name user registration from both merchants and individual livestreamers

 Prior to CAC and CAA, another regulatory body, the Professional Committee of Media Shopping of China General Chamber of Commerce also drafted a set of industry standards and guidelines to regulate live-streaming e-commerce in May.