The rise and rise of live-streaming e-commerce in China has inevitably led to more scrutiny from regulators. Now, new proposals could mean social media platforms will face the same regulatory standards as e-commerce platforms.
Social media apps – the likes of Douyin, WeChat, and Kuaishou – may be subject to the same oversight as giant commerce platforms such as Taobao, Pinduoduo and JD.com, reports the South China Morning Post (SCMP).
The draft regulation has been drawn up by the country’s State Administration of Market Regulation (SAMR). Although it does not name specific platforms, the draft says, “Social networks, live-streaming and other platforms that provide vendors with business space and support services related to completing transactions such as product browsing, order generation and online payment [...] should perform the responsibilities of e-commerce platform operators in accordance to the law.”
Such responsibilities, says the SCMP, include monitoring the “qualifications of vendors” and the quality of goods being sold, as well as protecting consumer rights and intellectual property, along with handing over data when asked to by the authorities.
SAMR is now consulting with the public regarding the proposed regulation.
Live-streaming shopping is the fastest-growing area of the country’s internet, and it received a huge surge during lockdown, when tens of millions of consumers used it to shop.
The country’s live-streaming e-commerce sector is forecast to grow from 433.8 billion yuan ($61 billion) in 2019, to 961 billion yuan ($136 billion) this year, due to the rise during the pandemic, according research from iiMedia.
This massive growth, however, has been accompanied by a big rise in complaints about fake, shoddy and damaged goods, as well as missing items, and no after-sales service.
Earlier this year, the China Advertising Association and the Professional Committee of Media Shopping of the China General Chamber of Commerce, independently drafted codes of conduct for sellers.
“While live-streaming e-commerce, currently the hottest sector in the internet industry, has made an immense contribution in boosting consumption, it has also become a breeding ground for misconduct such as making up fake sales figures,” Dingding Zhang, an internet industry commentator and former head of Beijing-based research firm Sootoo Institute, told the SCMP.
He added that he expected tougher regulation to now be introduced.
The SAMR issued a statement elaborating on the intentions behind the draft regulation, saying new e-commerce trends during the pandemic had made it necessary to “better research the functional roles of different service providers and their obligations under these new business models”.
Sourced from South China Morning Post, iiMedia; additional content by WARC staff