China writes rules to govern its booming direct-selling industry

BEIJING (Reuters) – China’s internet watchdog has drafted rules for the first time to regulate the country’s live broadcast marketing industry, stepping up control of e-commerce markets owned by tech giant Alibaba Group and JD.Com.

Last week, China released draft regulations aimed at preventing anti-monopoly behavior by internet platforms that have wiped out hundreds of billions of dollars in the value of some tech giants, including Alibaba and Tencent.

Direct marketing has seen its popularity increase over the past two years among brands like L’Oreal, Nike, Dyson and online shoppers, and most Chinese e-commerce platforms now offer the ability to buy and sell. sell products through live streaming.

Telegenic hosts sell products ranging from personal care products to home appliances in real time, and top Chinese live broadcasters like “lipstick king” Li Jiaqi and Viya can sell products worth millions of yuan in one. live broadcast session on platforms such as Taobao from Alibaba, Douyin from ByteDance and Kuaishou.

But the industry has also been criticized by some buyers and brands accusing some live broadcasters of misrepresenting products or rigging sales figures.

China’s Cyberspace Administration (CAC) said in a statement on Friday that under the rules, live broadcasters will be required to provide their real-name identification and social credit codes to internet platforms they use. The platforms will in turn have to submit regular reports to local authorities.

They will also need to regularly monitor their content and stop any illegal advertising, while live broadcasters will need to be over the age of 16 unless they get the consent of a guardian.

Behaviors such as promoting pyramid schemes, bad social habits or tampering with pageviews will be prohibited and platforms will need to establish a credit score list for live broadcasters and blacklist anything that breaks the laws. , among other rules, said ACC.

The live stream was broadcast extensively on Singles’ Day, the world’s largest online sales event, which saw Alibaba register around $ 74 billion in orders through its platforms from November 1-11.

The public will have until November 28 to respond to the CCA draft rules.