Following a mishap during a popular Taobao seller’s livestream which drew attention to the growing popularity of video content for the purpose of advertising, China’s broadcasting watchdog issued a notice on Nov. 1 urging the country’s e-commerce platforms to tighten content controls in preparation for the massive shopping festival known as Singles Day.
Why it matters: Although issued specifically for Singles Day, the notice is a signal that regulators now have e-commerce-focused livestreamed content in its sights, which many expect will restrict China’s flourishing e-commerce live-streaming businesses.
- Heightened government control over entertainment and gaming livestreams have forced platforms like Huya and Douyu to tighten their rules accordingly.
- Increased scrutiny will change how livesteamers—many of which are social media influencers referred to as key opinion leaders (KOLs)—partner with brands and present products to consumers.
- Content in various forms, from livestreaming to short video, is a major driver of China’s e-commerce sector.
Advertising is scrutinized by authorities for inaccurate, false or misleading claims. Adverts are also outright transparent about its sponsored nature. Paying influencers for their ‘opinion’ is currently a loophole around this integrity that warrants a revisitation of current regulation.
—Nicolas Chan, head of digital APAC at The Hoffman Agency to TechNode on Monday
Details: The National Radio and Television Administration (NRTA) issued a notice Friday ordering audio-visual e-commerce live-streaming programs and marketing campaigns to use “civilized and standardized expressions” and refrain from false advertising, vulgar content, and exaggeration to mislead consumers.
- The move comes after Li Jiaqi, the livestreaming “Lipstick King” known for having sold more than 15,000 units in five minutes, drew public outcry last week. Li promoted a non-stick frying pan during a Taobao livestream on Oct. 30 to an online audience of more than 400,000. The pan failed to cook an egg as promised, instead sticking to the bottom of the pan and burning during the episode.
New law brings structure, discipline to the willful world of Chinese e-commerce
- Li’s case highlighted what critics say is the mindless endorsement of products without trialing or fact-checking claims.
- State-backed media People’s Daily published a story on false, KOL-led advertising citing Li as an example on Monday.
- “It’s very clear that the KOLs are getting paid to promote the product. But there should be two bottom lines. Don’t endorse products with poor quality or those that you have never used before,” said Weibo user Wu Xiangdong, who identified himself as a lawyer.
- Rather than pushing product, the notice encourages e-commerce platforms to use livestreams and short video for the goal of poverty alleviation. The varying demands of poverty-stricken areas and populations can be addressed by leveraging new technologies such as big data, artificial intelligence, and blockchain, the notice said.
Context: China has been stepping up the regulation of e-commerce industry this year beginning with the rollout of the Electronic Commerce Law on Jan. 1.
- Social e-commerce platform Xiaohongshu, or RED, was pulled from Chinese app stores in July after user complaints about misleading content went viral on microblogging site Weibo.