New Commerce Live Streaming Regulations You Need to Know
Commerce live streaming was one of the biggest sales and marketing trends of 2020, but popularity also comes along with increased scrutiny, particularly after recent incidents such as the famous Kuaishou live streamer Xinba’s team member being caught selling fake products in his stream.
As a result of the incident, Xinba’s commerce company was fined 900k RMB ($139K USD) and the fake bird’s nest company was fined 2 million RMB ($310 USD). On top of that, Xinba and the live streamer on his team responsible for selling the fake product, @时大漂亮, are forbidden from live streaming until February 21, and other members of his team are forbidden until January 7.
New Regulations
Recently the several Chinese government departments have announced new measures to better regulate the booming live streaming industry.
The State Administration for Market Regulation (国家市场监督管理总局) made it clear that live streamers are not allowed to share fake news, deceive and mislead viewers, and they should be honest with their livestream performance, including the amount of viewers, likes and the ROI.
The National Radio and Television Administration published an announcement on November 23 that it would regulate virtual gifts behaviours especially from minors.
To sum up, at the moment there are four key changes that affect the commerce live streaming industry:
1) Monitoring for Fake News and Fake Stats
The government will use a combination of human and AI monitoring to pay closer attention to live streams with high viewership, high sales, lots of virtual gifts, and a history of product quality issues.
With stricter monitoring in place, viewers may find out that for some live streamers, the average number of viewers will decrease from several thousand to several hundred as they eliminate bots.
2) The government will pay extra attention to top live streamers
Several top live streamers dominate and drive much of the commerce live streaming industry and as such brands must pay exorbitant amounts to work with them. But they are willing to because many brands felt like working with top streamers was safer and more trustworthy.
The recent Xinba scandal not only affected the trusting relationship between him and his viewers, it had a negative effect on the entire industry, causing viewers and brands to question the reliability of other top streamers.
As such, the monitoring of those streamers will be even more intense. As a potential side effect, brands shouldn’t be surprised if streamers want a longer period to review your products prior to agreeing to work with you, or they ask for more information to verify your product’s quality and safety.
3) Certain celebrities will be barred from streaming
Inviting celebrities to participate in a live stream is a very popular way to drive traffic to the stream, however, moving forward, the government will restrict celebrities that are deemed to have done bad things in the past from appearing on live streams.
For example, actress Fan Bingbing (范冰冰) who has been on the government’s bad side since her tax evasion scandal, and actress Li Xiaolu (李小璐) who got a lot of bad press for cheating on her husband.
This could be an issue for brands that work with Fan. Earlier this year luxury beauty brand Guerlain announced that Fan was its newest global ambassador. Beauty brands are some of the biggest users of ecommerce live streaming.
However the regulations are unclear as to whether her image can still appear in the live stream, and only she herself is banned from attending, or if showing her image is banned too.
If this is the case, it will also be an issue for Fan’s personal brand Fan Beauty whose popular face masks feature her image on the box.
4) Live streamers, accounts and ID should match
To start a livestream, a precondition is that the live streamer, the ID and the live streaming account ID must all match.
This may sound easy, but actually many live streamer’s accounts are in fact owned and registered by the MCNs they are signed with. This is done so that the MCN can retain more control over the live streamer.
Oftentimes streamers are not loyal to MCNs and will try to leave once they’ve gotten successful. Usually because the MCNs take advantage of the streamer and keep most of their earnings.
So this new rule that a streamer must own his or her account is actually a positive change for content creators who will now have more ownership over their traffic.
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