Live streaming on eCommerce: trend explained

by Karen Wang

Last year Elon Musk, CEO of Space X, said in an interview with the New York Times that “We are already Cyborg. In sense that, you have your computers and phones, and APPs on your phones, and your social media whatever. You are already part electronic if you think about it”. 

It might be a bit provocative sentence, however we must to admit that all kinds of electronic products have become the "daily necessities" in our life. Think especially to e-commerce in China that is developing so rapidly and the last booming phenomenon that is  livestreaming sales. 

Such new business mode brings a more convenient way of life for all of us, but also new potential threats in the process of live streaming sales. Therefore let’s take a look to see how the e-commerce platform should supervise the livestreaming sales to protect the rights and interests of consumers. 

Qualification

According to E-commerce Law, e-commerce platform, as one of the e-commerce operators, should strictly register, verify, archive and update the business entities on the platform, and regularly review the authenticity of relevant information.

Meanwhile, according to the Notice on Strengthening the Management of Online Live Show and E-commerce Live Streaming Sales (the “Notice”) issued by National Radio and Television Administration, the e-commerce platform should also take the livestreaming room, the head streamer and account number, and the livestreaming activities with higher flow and sales as the main compliance targets. 

Business Grading File

In practice, it might happen that in some case livestreaming rooms or live streamers sell fake and shoddy products. 

According to the Notice, the platform shall take measures against the livestreaming room and streamer who frequently are involved in violations, such as stop the recommendation, limit the duration etc. 

If the circumstances are serious, the platform can take more severe measures, such as close the livestreaming room, blacklist the relevant personnel or even permanently ban from livestreaming on the platform. 

Unfair Competition

Unfair competition includes false publicity, false label, abuse of dominant position etc. The unfair competition of e-commerce platform is consistent with the foregoing traditional unfair competition.

In daily online shopping, some e-commerce platforms make false publicity in order to attract consumers. The most common way is to hire some people to “praise” on the products ("Click Farming"), so as to improve the ranking and sales of products.

In the face of unfair competition such as clicking farming, e-commerce platforms may need to establish detection, capture and traceability of abnormal data, and prevent such behaviors through big data analysis to reduce losses and maintain market order.

Counterfeit Products

Because of the virtuality of the network, it is more difficult for consumers to identify whether the products bought are infringing products or counterfeit products when they are shopping online. 

For example, some consumers purchased a bag with well-known brand on a certain platform, they may choose a professional institution for appraisal, however most results undoubtedly show that the product is counterfeit. 

According to the Statistics of Judicial Big Data of China in 2020, 9.15% of online shopping contract disputes involve counterfeit products. 

In view of this, the e-commerce platform should strictly conduct preliminary examination on the qualification of product operators and the ownership of relevant intellectual property rights, and also focus on the registration and filing of the category and quantity of products sold for later traceability.

Advertisement

The illegal acts of advertising mainly include exaggerating propaganda, vulgar content, and expressions that stimulate consumers' buying. The frequent occurrence of these behaviors is one of the characteristics of livestreaming activities. 

Livestreaming sales has the characteristics of immediacy, which makes it difficult to audit in advance and pursue responsibility afterwards. 

Based on the Statistics of Judicial Big Data of China in 2020, 22.56% of the online shopping contract disputes, consumers think that the seller has the false publicity or other fraud behaviors. 

In this regard, the e-commerce platform should focus on strengthening the supervision of illegal acts such as false advertising and illegal advertising of all kinds of products, especially in key areas such as medical treatment, drugs, food, health food and formula food  for special medical purposes etc.

Of course, the e-commerce platforms should not only pay attention to the above aspects, but also improve the internal supervision system from time to time, to better protect the rights and interests of consumers.