People’s Daily calls for tighter control of live-streaming e-commerce in China as controversies mount

An opinion piece published by the chief mouthpiece of the Chinese Communist Party has called for tighter oversight of live-streaming e-commerce, a popular but controversial segment of the country’s online shopping industry, in a sign that government attitude towards the sector may be shifting.

While employing influencers to sell goods online has become an important way for e-commerce platforms to attract consumers, China should improve regulation of the thriving sector, which is creating “chaos”, according to the People’s Daily piece published on Wednesday.

A series of misconduct in the live-streaming industry, from fraudulent advertising to misleading pricing, should be addressed and punished for the sake of the sector’s healthy and sustained growth, the piece said.

Live-streaming e-commerce has seen exponential growth in recent years. Sales in the sector jumped 58.9 per cent year on year in the first 10 months of this year, reaching 2.2 trillion yuan (US$311 billion) and accounting for 18.1 per cent of all online shopping sales in China, according to data by the Ministry of Commerce.

Some of the top industry players include Alibaba Group Holding’s Taobao, ByteDance’s Douyin and Kuaishou Technology. Alibaba owns the South China Morning Post.

However, the market is also seeing some early signs of saturation.

China gained 51 million new users of e-commerce live-streaming last year, fewer than the 75.8 million added in 2021. The numbers are likely to decline further this year, with only 12 million new users added in the first six months.

Still, the People’s Daily piece warned about what it saw as unchecked abuses in a burgeoning market, which it said could hurt consumer rights and reduce market competition.

While China has tolerated live-streaming e-commerce, the model is facing increased scrutiny abroad. Indonesia in September banned e-commerce transactions on social media, including ByteDance-owned TikTok, to protect the country’s smaller offline merchants, becoming the first government to do so.

The opinion piece said that advocating for tighter control of the sector does not mean “hindering its development, but rather ensuring that it stays on a healthy development track to strengthen its future growth”. The piece called on regulators, online shopping sites and merchants to cooperate in fighting market abnormalities.

Chinese authorities have already introduced several rules targeting the industry. In April 2021, the Cyberspace Administration of China and six other regulators jointly released regulations aimed at reining in malpractices such as selling fake products, falsifying view numbers and promoting pyramid schemes.