The success of e-commerce live streaming in China
In the last years, e-commerce live streaming, a combination of streaming video and e-commerce, have become increasingly popular in China.
During Covid-19, live streaming proved to be a valuable tool for brands and retailers, who used platforms to engage consumers and showcase their products.
New rules and standards occur in the e-commerce live streaming sector
Since the success of e-commerce live streaming in China, a supervision occurred because of fake data, exaggerate promotions, unqualified products and others. China has no laws regarding e-commerce livestreaming, that’s why in June the China General Chamber of Commerce issued a notice on the development of national standards for e-commerce livestreaming, which are expected to be adopted in July.
An industrial forum was recently held in Hangzhou, where the provincial Internet Business Association published a draft of the comment standards for live e-commerce, marking the first time that these rules were developed in the country.
On June 8, 2020, Professional Committee of Media Shopping, China General Chamber of Commerce released two drafts of Group Standards:
- Basic standards of video live shopping operation and service (definitions, product quality, promotion, practitioner qualification, etc.)
- Guidelines for the evaluation of service system of online shopping integrity (the rights and obligations of the enterprises, live streamers and livestreaming platforms)
In addition, a six-month campaign, led by the Cyberspace Administration of China, is already doing its job with regards to the goal of sanctioning:
- Illegal content,
- Counterfeit goods.
Authorities have already reported that 44 small platforms have received penalties ranging from fines to closings. While, nearly 2,000 sellers in Beijing received warnings and were ordered to pay taxes on their inflated sales figures.
In the meantime, companies must comply with general regulations such as the advertising law, the fleeting nature of the transmissions allowed the sellers to play quickly and without rules, such as those which prohibit the use of hyperbolic advertising.
For example, phrases like the following are considered illegal:
- The lowest price in the whole network (全网最低价),
- National level (国家级),
- Superlatives (最高级),
- Best (最佳).
As a result, it may be time for additional updates to the laws and regulations to specifically address e-commerce livestreaming.
New standards will lead to a better consumer experience
A report on consumer satisfaction on live streaming e-commerce released by the China Consumer Association on March 31, 2020, showed that 37.3% of consumers surveyed had encountered problems in live streaming e-commerce.
The main concerns:
- Product quality is not guaranteed
- Poor after-sales service
Therefore, this new standards and regulations will have a positive impact on live streaming e-commerce, because these rules can increase the perception of safety and quality by consumers, and therefore lead to better sales for companies.
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