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China releases new rules for live streaming e-commerce

China has released new draft regulations (Chinese language only) on e-commerce, with a focus on live streaming. The regulations aim to create a stricter environment for how brands, platforms and agents operate.

Overall, this presents opportunities and challenges for Australian exporters. China hopes to reign in undesirable behaviour and a lack of transparency in live streaming. This means more confidence for exporters when negotiating with agencies, key opinion leaders (KOLs) and live-streaming hosts.

However, Australian brands must now take more care with live-streaming initiatives. Brands must ensure their representatives follow the regulations to avoid fines and other penalties.

New rules for live streaming

The regulations cover aspects of live streaming such as:

  • dress code
  • language used
  • ‘honest representation’ of products.

The regulations also ban live-streaming sales of product categories deemed harmful to ‘public good’. These include some adult entertainment products. Australian exporters in these categories must reassess their e-commerce and communication strategies.

Live streaming remains central to e-commerce

For other products, live streaming is still a core part of e-commerce strategies in China. The channel has become a cornerstone of the Chinese internet. Live streaming platforms had 617 million active users registered in 2020.

Tmall sales data highlights the influence of live streaming in categories such as skincare. Two of China’s biggest live streamers are known as ‘Viya’ and ‘Austin’. When assessing sales revenue based on product claims, listings that note ‘Viya recommended’ have an average revenue of US$5.5 million a month. ‘Austin recommended’ listings average US$5.6 million a month. (Source: China SkinnyThe Skincare Tracker, accessed September 2021.)

However, the live streaming industry has also faced challenges. Hard-to-monitor content, fake sales scams and growing celebrity culture have contributed to China’s policy shift.

Across social media, Chinese users are responding favourably to the regulation changes. They come amid a wider campaign to clean up business practices.

About this insight

We commissioned this insight from China Skinny. China Skinny is a Shanghai-based market research consultancy.

How we can help you with e-commerce in China

Our specialists in China can help you with advice on:

  • e-commerce market entry models
  • how Chinese e-commerce is different from the rest of the world
  • e-commerce operations in China
  • business models in Chinese e-commerce.
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