With Chinese authorities planning to tighten regulations covering livestreaming in the country, brands will likely have to reassess their use of influencers.
The massive growth of livestreaming by brands and its growing influence on consumer behaviour has been attracting the eye of the authorities for some time.
Campaign Asia–Pacific reports that, according to government sources, the new rules will be aimed at tackling such abuses as selling fake products, making false claims in adverts, and falsely inflated traffic volume claims.
The regulations will also mean that individual vloggers and livestreamers will be seen as businesses, so greatly increasing their legal liabilities, and require them to comply with e-commerce laws introduced last year.
The most contentious part of the new regulations, according to Campaign Asia–Pacific, concerns the question of whether livestreamers will also be defined as advertising endorsers; if they were to be, they would have to comply with further onerous regulations, including being banned from using superlative terms such as the “best” or “top” when promoting products.
While the rules will mean more potential risk for brands and require brands to oversee their livestreaming partners more closely, they have been generally welcomed by e-commerce platforms and influencer agencies, Campaign Asia-Pacific says.
There is a view that a degree of governance is needed in the industry and that this will help both brands and platforms in the longer term.
“The livestreaming market in China is still growing extensively without much order,” Zhang Guowei, the head of JD.com’s livestreaming business,” noted. “There is still chaos in the livestreaming industry although it has been developing for years. [The] regulator’s move is more effective than us as a platform.”
Earlier this summer, the China Internet Report 2020, from SCMP Research, detailed the spectacular growth of livestreaming in China, even before the COVID pandemic. Lockdowns have simply accelerated that growth.
The market is now worth some $16.3 billion, up 54% on 2019, compared to 41% growth between 2018 and 2019. And in 2020, there are 613 million livestreamers in China, a 29% increase on 2019, which compares to similar growth in 2018–19.
The report’s analysts argue that the livestreaming has entered a third phase of development, moving from a niche market predominantly of teenage gamers, to a shopping and e-commerce channel, markedly for FMCG goods.
In the third phase, livestreaming will increasingly reach a greater variety of industries, such as real estate, cars, travel services and luxury goods.
Sourced from Campaign Asia-Pacific, SCMP Research; additional content by WARC staff
