State Administration for Market Regulation Photo: VCG

China's market regulatory authority announced on Tuesday that a draft regulation for supervising live-streaming e-commerce is now open for public feedback. The proposed measures seek to enhance supervision of the fast-growing live-streaming e-commerce industry, while promoting a healthy market environment.

The draft regulation was jointly formulated by China's State Administration for Market Regulation (SAMR) and the Cyberspace Administration of China (CAC), following comprehensive research and extensive stakeholder consultations, according to a notice published on the SAMR's official website.

The draft regulation sets clear responsibilities for various players in the sector, including platform operators, live-stream hosts, and marketing service providers. Under the new rules, e-commerce platforms will be required to implement stricter identity verification and qualification checks for hosts and their supporting agencies. The platforms must also enhance penalties for violations.

Live-stream hosts will be obligated to provide truthful, accurate, and comprehensive information about the products or services they promote. Any attempts to deceive or mislead consumers will be prohibited, per the draft regulation.

The regulation also introduces stronger supervisory tools and clarifies the legal consequences for failing to meet compliance requirements, according to the SAMR notice.

One of the standout features of these regulations is their targeted and nuanced oversight of key players in the live-streaming sector, Li Min, Senior Partner at Hansheng Law Firm in Shanghai and an analyst of E-Commerce Industry, told the Global Times on Tuesday. 

He emphasized that this precision supervision approach will help directly address the industry's most pressing challenges, such as fraudulent marketing and cutthroat competition, which is expected to boost consumer confidence and standardize market practices.

The latest move comes as live-streaming e-commerce has become a major driver of China's digital economy, fueling consumption and creating employment opportunities. However, the rapid expansion of the sector has also given rise to problems, including fraudulent sales tactics and the circulation of substandard goods, a SAMR spokesperson said in response to media inquiries on Tuesday.

The new regulation aims to enhance routine oversight of live-streaming e-commerce, fostering a fair and transparent online trading and consumption environment, protecting the legitimate rights of consumers and businesses, and promoting the healthy development of the industry, according to the spokesperson.

The proposed measures align with higher-level legal requirements and the unique characteristics of the live-streaming e-commerce industry, ensuring they do not impose unnecessary burdens on stakeholders, the spokesperson said.

In addition to strengthening oversight of transactional activities, the measures explore innovative approaches, such as regulating online traffic for non-compliant entities and establishing systems for training and blacklisting live-steam marketing personnel, according to the spokesperson. 

Looking ahead, the SAMR will refine the draft based on feedback from the public consultation, with plans to finalize and implement the regulations as soon as possible.

Official data showed that China's online retail sales totalled 3.6 trillion yuan ($499.6 billion) in the first quarter this year, with online retail sales of physical goods increasing 5.7 percent.

Global Times