China Cracks Down On eCommerce Livestreaming Platforms

In China, eCommerce livestreaming is a huge revenue generator. As the country increases its regulatory scrutiny of eCommerce companies, such livestreaming has become the latest target.

The State Administration of Market Regulation (SAMR), China’s market regulator, has increased its scrutiny of livestreaming eCommerce platforms, Reuters reported on Tuesday (March 16). The regulator cited concerns about poor quality products and misleading advertising as internet influencers sell goods directly to consumers.

Without naming names, the SAMR said that it had met with several livestreaming eCommerce companies, which had presented self-disciplinary measures. Per Reuters, the regulator said that all livestreaming platforms should “quickly conduct self-control and comprehensive inspections” on product quality, and should punish platforms that sell sub-par-quality items.

The regulator’s actions come amid the increased popularity of livestreaming eCommerce platforms run by internet giants such as Alibaba’s Taobao, ByteDance’s short video app Douyin and Kuaishou, which offers a short video and social media platform.

Tencent and Baidu, another tech company, were fined 500,000 yuan each for past acquisitions and investments they have made without seeking regulatory approval.

In the U.S., the use of social media to buy and sell goods and services is ramping up. The most notable player is Facebook and its photo-sharing brand Instagram.

The latest company to make a move is TikTok, which has briefed advertisers on its suite of new 2021 features. One of those tools allows the most influential users to share links to products and net commission on the sales they promote. The new offering gives users the ability to earn money from any product they endorse, not merely the ones with which they’ve signed official sponsorship deals.

“Culturally, TikTok is well-placed for livestreamed commerce to capture the dissolving distinction between content and commerce, because it doesn’t feel as polished as other platforms,” said Jack Smyth, creative technology officer at WPP’s Mindshare.

Over the summer, Facebook announced its own set of commerce upgrades to Instagram, including Instagram Shop, an “in-app shopping destination where people can discover products and brands they love from across Instagram.”