Policy Explained | Understanding the new regulation of live streaming in China
With growing incidents and criticism towards the live streaming sector in China, the authorities finally took action in November, when new guidelines were announced by China National Radio and TV Administration to regulate online behaviour for live streaming platforms and hosts.
Live streaming e-commerce in China has had explosive growth over the past three years. Valued at $4.7 billion back in 2017, this sector’s GMV (Growth Merchandise Value) is estimated to hit $97 billion in 2020 - a more than 1900% increase (source: Qianzhen Academy). Many business and tech providers have benefited from its growth and the lack of regulations in place.
What are the key takeaways from the new guidelines?
Preventing irresponsible spending online through gifting, particularly for underage internet users
Underage users are not allowed to give out credit gifts to live streaming hosts/influencers.
Users need to be registered with the platform to be able to give gifts to live streaming hosts (please be aware that virtual gifts on live streaming in China do bear money value).
Live streaming platforms shall put a spending limit per day on its users and enforce notification to its users when reaching spending limits.
Regulating live streaming hosts and the content they are broadcasting to their audience
Live streaming platforms to identify and report dishonest hosts, who employ fake followers, to National Radio and Television Administration.
Live streaming sessions to be labelled by their categories. Quality control shall be put into place by the live streaming platforms to ensure the content of the live streaming session matches its categories.
Live streaming hosts are to be scored by their professionalism. Live streaming platforms are responsible for making sure whoever registers as the hosts know clearly what general laws they need to abide by.
Platforms are advised to adjust their recommendation algorithms to factor in hosts’ professionalism scores.
Brands will benefit
With new guidelines in place, the quality of live streaming content is likely to improve, with clearer boundaries and more professional hosts. Brands should welcome such changes, as the risk of showing your brand alongside poorly portrait live streaming content or featuring your products on dishonest channels and hosts, can be reduced.
Ignoring local laws when entering a market like China is foolish. You can check out another of my articles in the Policy Explained series, China’s advertising law: What you need to know that you can’t miss.