With the increasing relevance of livestreaming in China’s digital landscape in recent years, especially in the realm of e-commerce, more regulations have become necessary to restrict fraudulent activity and misinformation, writes Sandra Weiss
During the Covid-19 outbreak in China, livestreaming was a market saviour for many brands and stores that were forced to shut down their offline channels due to the lockdown. As consumers were also isolated in their homes and spent more time online, the period became an opportunity for brands to focus on their online sales channels, a big part of which included livestreaming.
Livestreaming was a market saviour for many brands and stores that were forced to shut down their offline channels due to the lockdown
In terms of percentages, Taobao Live saw a 719% month-on-month increase in new merchants in February, while the number of livestreaming sessions on Pinduoduo increased by over 500% from February to March of this year.
The importance of livestreaming in China was also demonstrated during the 6.18 festival, which was the first nationwide shopping holiday this year since the Covid-19 outbreak. Over the course of the 18 day event, JD hosted over 300,000 livestreaming sessions, with livestream hosts ranging from KOLs to CEOs. In addition, more than a dozen livestreams were hosted through Alibaba on 16th June, which, combined, saw a total of more than 100 million RMB in sales.
New rules and regulations
Livestreaming is therefore extremely prominent in e-commerce and has helped drive sales for a vast number of different brands and industries. However, with the increased use of livestreaming, there has also been an increase in concern for the misuse of the new format, especially due to the fact that livestreams are not a permanent form of content. Examples of these concerns include vulgar or illegal content, fraudulent activity, and misrepresentation of products or services sold through livestreaming, which could include false promotions and poor quality of products.
In order to tackle these concerns, several departments in China, including the State Administration for Market Regulation, have begun to work on developing standards for – and increasing supervision of – livestreaming activity. National standards for e-commerce through livestreaming are being developed by the China General Chamber of Commerce and, provincially, by authorities in the Zhejiang province, where Alibaba is headquartered. These standards are expected to be officially released and implemented in July, and will cover livestreaming platforms, hosts, networks and all entities involved in the e-commerce livestreaming industry.
The China Advertising Association (CAA), a non-profit organization that represents the Chinese advertising industry and promotes best practice, released its Code of Conduct for Online Live Marketing, which took effect on 1st July. The report stipulates the rights, obligations and responsibilities of businesses, brands, or other participants of e-commerce activity through livestreams. A summary of the main points outlined are provided below:
- Livestreaming hosts must have their real names authenticated on the platform before any livestreaming activity can be conducted. During the front-end livestreams, hosts may still use screen names, as long as they are in line with the requirements of the laws and regulations.
- During the livestream, all information provided to viewers must be complete and accurate. Livestream hosts cannot misrepresent, exaggerate, or spread false information on the products or services they promote, and cannot mislead viewers.
- Illegal or vulgar content cannot be spread through livestreams.
- Any marketing data from the livestream that is provided by the host, for example to the livestreaming platform or to the merchants, must be accurate. This includes livestream viewership numbers and sales numbers.
- Livestreaming platforms must provide marketing data as requested by the relevant authorities and must operate under their supervision.
- If breaches of the code of conduct are found, the CAA will report these instances to the relevant authorities for investigation.
In terms of recognising and regulating the profession of the livestreaming host, several steps have also been taken:
- Earlier this year, the Ministry of Human Resources and Social Security in China released a report that recognised 10 new professions, one of which was livestreaming salesperson, listed under internet marketing specialist.
- Authorities in Zhejiang province released ‘Specifications for Training and Evaluating E-commerce Livestreaming Talent’ on June 26th. In this report, the first standards in China are provided for livestreaming hosts and include areas such as skill level, professional knowledge, training, talent evaluation and certification. These regulations set three skill levels – junior, intermediate and advanced – which are determined through independent assessments.
Finally, led by the Cyberspace Administration of China, crackdowns on illegal livestreaming activities have already begun, with a large number of livestreaming platforms already being warned or terminated due to their spread of vulgar or illegal content.
With new regulations and scrutiny on livestreaming activity in China, e-commerce through livestreaming is likely to become even more popular due to the additional trust that viewers will have for the information about the products and service sthey are being sold.
Sandra Weiss works for RedFern – a China-specific, full-service agency that helps brands navigate the digital ecosystem, increase their brand awareness and convert that awareness into sales. Learn more here.