China’s market regulator, the State Administration of Market Regulation (SAMR), has been incredibly active of late, with a newfound interest in everything from the conduct of eCommerce platforms to FinTech. Regulators are keyed into the online market, Wei Li, an SAMR official told Xinhua News Services, according to Reuters reports, and stands ready to “adopt more powerful supervision methods this year and deploy a series of actions” to clear up “prominent problems in the online market.”
The aim of the widespread crackdown is consumer protection, according to government sources, and SAMR has been very active since December of last year. Last week, SAMR issued fines for 10 of China’s largest tech firms — Tencent, Baidu, Didi Chuxing, SoftBank and ByteDance among them. Alibaba is independently facing a SAMR probe of its potential antitrust behaviors. The regulator has additionally announced it will accelerate the construction of a system that will collect online transaction information in real time, allowing for better monitoring and coordination of how well the segment is complying to new rules forthcoming for the entire internet sector.
A new sub-segment of which, it seems, has caught SAMR’s attention as of this week.
According to Reuters reports, the regulator is taking a closer look at eCommerce livestreaming services, citing concerns about poor goods quality and misleading advertising as internet influencers leverage these channels to sell direct to consumers. Though no firms were named in specific as being of particular interest in the ongoing investigation, regulators have confirmed they’ve at least met with several livestreaming eCommerce companies that have already presented self-regulation measures.
The regulators, according to reports, are looking for comprehensive self-inspections from livestreaming platforms and internal disciplinary measures for those using them to sell sub-par items.
The interest among regulators is perhaps unsurprising in China, given SAMR’s sudden interest in all businesses digital — and the exploding popularity of livestreaming eCommerce in China. Alibaba’s Taobao, ByteDance’s short video app Douyin and Kuaishou run livestreaming eCommerce services, and the sector is estimated to have brought $61 billion in revenue — a figure expected to double to $136 billion, pushed by increased usage due to the pandemic.
“Before the pandemic, live streaming was only seen as an option for brands to reach Chinese consumers,” Jialu Shan, economist and scholar in Asian and Emerging Markets at the International Institute for Management Development, said in a CNBC report last year. “But now it (has) become very integral to how people shop. To me, it is going to be a new normal channel to drive new sales, create new revenue streams. But that is not to say that every foreign brand should (jump) into livestreaming without doing everything else.”
And, indeed China is far from the only market where livestreaming eCommerce is seeing a major growth spurt — though perhaps it is commanding the most consumer and regulator attention there are present. The livestreaming craze is truly becoming a global one.
It is why ticketing giant Live Nation purchased livestreaming startup Veeps to kick-off 2021, claiming the service’s footprint in the growing space is a perfect compliment to their business.
Streaming commerce platform TalkShop.Live Founder and CEO Bryan Moore told PYMNTS in a recent discussion that the pandemic had created pressure on merchants large and small to create a new kind of space to interact with their clients with the physical world largely closed off to them.
“At a time with stores across America closed, we help provide people with their live digital storefront and be the digital Main Street where people can tell the story behind their product,” Moore said. “Whether you’re Peter Frampton or Paul McCartney or Garth Brooks or Matthew McConaughey, or whether you’re the Hungry Monkey Baking Company in Illinois, what you’re trying to provide — whether it’s for your fans or your customers — is the same thing. You’re saying, ‘Come in and have an experience. Let me tell you the story behind my product.’ And that’s really where we’re seeing the sales drive and the sales convert.”
And that higher propensity for conversations that is associated with livestream leveraged correctly is pushing more events by bigger and higher-profile players forward. Walmart and TikTok have just hosted a livestream social shopping event to ring in the spring.
The spring event followed a December holiday-themed stream featuring 10 TikTok creators that managed to pull in over 7,000 more views than the company expected. The tutorial-heavy second event was largely focused on beauty and wellness products favored by TikTok creators participating in the event.
Livestreaming as a tool for sales, it seems, is picking up steam worldwide. Whether that popularity holds on, depends. The jaundiced eye of regulators could certainly chill the enthusiasm. And even if that doesn’t happen, or is only regionally relevant in places like China, there is the reality that physical commerce will reopen in the not too distant future. It remains if the next best thing to being there remains as popular when actually being there is once again an option.
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