China’s call for stricter oversight in live-streaming e-commerce

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In a surprising move, the People’s Daily, a prominent mouthpiece of the Chinese Communist Party, has called for enhanced oversight of live-streaming e-commerce, signaling a potential shift in the government’s stance towards this burgeoning industry. While live-streaming has become a vital tool for e-commerce platforms to engage consumers, concerns over fraudulent activities and market saturation have prompted calls for increased regulation.

Live-streaming e-commerce has witnessed remarkable growth in recent years, with sales soaring by 58.9% year on year in the first 10 months of the current year, amounting to a staggering 2.2 trillion yuan (US$311 billion). Major players in the sector, including Alibaba Group Holding’s Taobao, ByteDance’s Douyin, and Kuaishou Technology, have contributed significantly to this boom. However, signs of saturation have started to emerge, with the addition of new users declining from 75.8 million in 2021 to 51 million in the past year.

The People’s Daily opinion piece highlights the “chaos” in the live-streaming e-commerce sector, pointing to various instances of misconduct, including fraudulent advertising and misleading pricing. These issues, if left unaddressed, could pose a threat to the sector’s healthy and sustained growth. The editorial stresses the importance of regulating the industry to protect consumer rights and maintain fair market competition.

While China has tolerated live-streaming e-commerce within its borders, the model is facing increased scrutiny abroad. Indonesia, for example, took a proactive stance by banning e-commerce transactions on social media platforms, including TikTok, to safeguard the interests of smaller offline merchants. This global scrutiny adds pressure on China to address potential abuses within its own market.

The Chinese government has already taken steps to regulate the live-streaming e-commerce industry. In April 2021, the Cyberspace Administration of China, along with six other regulators, released regulations aimed at curbing malpractices such as selling fake products, falsifying view numbers, and promoting pyramid schemes. The People’s Daily opinion piece aligns with these efforts, emphasizing the need for ongoing collaboration between regulators, online shopping platforms, and merchants to combat market abnormalities.

The opinion piece clarifies that advocating for tighter control does not equate to hindering the sector’s development but rather aims to ensure a healthy trajectory for sustained growth. Striking the right balance between fostering innovation and preventing abuses is crucial for the future of live-streaming e-commerce in China.

As live-streaming e-commerce continues to evolve and play a pivotal role in China’s online shopping landscape, the government’s call for increased oversight reflects a commitment to addressing potential pitfalls in the industry. Stricter regulations, combined with collaborative efforts between regulators and industry players, will be essential to navigate the challenges and ensure the sector’s continued growth on a stable and sustainable path.

(Source: Ben Jiang | SCMP)

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