China’s top livestreamers, including “lipstick king” Li Jiaqi, and major e-commerce platforms said on Wednesday that they will “rectify” behaviors that violate consumer rights standards. They made the announcements after a local government body singled them out for the transgressions.
The Zhejiang Consumer Council, a provincial level consumer rights authority, said last week that nearly 30% of livestreamers and 40% of the items sold during Singles’ Day shopping events in November didn’t meet product standards or comply with advertising rules.
Five major e-commerce platforms—Taobao, Pinduoduo, JD.com, Kuaishou, and Douyin—and 17 top streamers, each with millions of followers on these sites, were subject to the council’s probe. The consumer group criticized them for exaggerated advertising, misleading pricing, obscene gestures, and other violations.
The e-commerce platforms submitted reports to the council on Thursday to indicate their plans for “rectification,” saying they’ve identified and removed the products and merchants that violated the rules. They also pledged to improve the management of livestreamers and their live events, and monitor the streams’ content and products’ quality more tightly.
Meanwhile, the livestreamers said they will suspend sales of the products in question and have issued refunds to customers.
Regulators are creating new rules for China’s live commerce sector to address consumer rights matters and tax the incomes of high-profile personalities. Last week, livestream queen Viya was fined RMB 1.34 billion (USD 210 million) for tax evasion, leading to thousands of streamers repaying the taxes that they owed.
Live commerce is an evolution of e-commerce, moving product listings from static pages to live videos where viewers can interact with the hosts. The format blends entertainment with enticing sales offers, and livestreamers have created a multi-billion-dollar industry that sells everything from lipsticks to rocket launches.
E-commerce companies like Alibaba’s Taobao have invested heavily in this sales channel, commissioning popular influencers who have massive numbers of followers, many of whom are willing to click “buy.”
Now, a slew of measures is being drafted for the industry. In October, China’s broadcasting regulator, the National Radio and Television Administration, said it will scrutinize livestreamers’ content. The top tax supervisor, the State Taxation Administration, called for stricter tax investigations related to livestreaming revenue after Viya’s hefty fine was announced. The Zhejiang Consumer Council also said it will carry out more investigations to pressure livestreamers to comply with regulations.