Live-streaming e-commerce is experiencing explosive growth in China and helping the country’s retail sector to recover from the impact of coronavirus, but experts have warned of widespread malpractice whereby fake traffic is purchased to boost viewer counts.

A recent report by the South China Morning Post revealed the scale of the problem after talking to industry insiders, who said fake traffic is an ‘open secret’, not just in China’s booming live-streaming sector, but across global social media platforms too.

“Fake traffic is not even an unspoken rule, but a widely known issue that not only the live-streaming sector but also the whole internet industry at home and abroad is trying to address,” said Zhang Dingding, an independent internet industry observer. “I don’t doubt the existence of fake users, but the key questions are who is behind the fake traffic,” he added.

One answer is the role played by agencies that have been set up to manage and promote the live-streamed content produced by China’s growing community of online influencers.

According to entrepreneur Huang Xiaobing, who ran a Tianjin-based agency until she retired recently, a common way of helping aspirant live-streamers gain popularity is to buy virtual gifts that trick algorithms into inflating viewer numbers.

“Everyone in the industry does this one way or another,” she said, while adding that platforms themselves also sometimes artificially inflate numbers so it appears more people are watching.

Parklu, a Shanghai-based influencer marketing platform, told the Post that live-streamers may be motivated to drive up sales numbers because of the commission they make from brands – they can be worth about 20% of sales.

They may, for example, use bot-controlled accounts to buy products with their own money and return up to half of the items afterwards, pocketing the commission.

The problem has certainly caught the attention of the Chinese authorities, which are tightening regulations for the industry. The Cyberspace Administration of China, for example, published draft proposals last month to prohibit the “fabrication or alteration of followers, views, likes, transactions and other traffic numbers” on live-streaming platforms.

Meanwhile, the National Radio and Television Administration recently announced new rules, requiring live-streamers in China and their gift-giving fans to register with their real names. In addition, internet platforms have been told to set a cap on the gifts that each user can give.

Sourced from South China Morning Post