Salespeople adopt livestreaming, an emerging retail channel, to sell products to customers. (PHOTO PROVIDED TO CHINA DAILY)
While livestreaming may be seen as the “savior” of millions of Chinese mainland business owners and merchants bruised by the coronavirus pandemic, offering a glimmer of hope in their efforts to keep their operations afloat, there’s also a flip side of the coin.
The rise to prominence of the new e-commerce model in the past few months has spawned a host of problems, such as fake advertising, substandard products and difficulty in getting after-sales services. Behind the scenes is the lack of a sound regulatory and supervisory mechanism, and experts and industry insiders say the absence of that mechanism hampers the sector’s growth.
They want such a mechanism to be in place as soon as possible.
Livestreaming came under the public spotlight as COVID-19 battered businesses and social life, confining millions of people to their homes ever since the outbreak took its toll at the beginning of the year. The new business model has provided a fresh experience for consumers to shop online.
Before the outbreak, livestreaming e-commerce was adopted mainly for online sales of clothing and cosmetics, and its fans were limited to a specific group. But now, various businesses, large and small, are banking on it as one of the quickest and most effective survival modes.
Salespeople adopt livestreaming, an emerging retail channel, to sell products to customers. (PHOTO PROVIDED TO CHINA DAILY)
Livestreaming shop emerges
Business tycoon Dong Mingzhu made a splash recently when she entered the livestreaming room. The chairwoman of home appliances giant Gree Electric Appliances helped the company rake in total sales of 6.54 billion yuan (US$922.6 million) during her latest livestreaming show on June 1. The daily turnover was equivalent to 32 percent of the company’s revenue in the first quarter of this year.
The burgeoning industry is thought to have emerged as the mainland economy’s new growth engine, helping to cushion the heat of the pandemic, creating fresh job opportunities and boosting local consumption.
According to market consultancy iiMedia Research, the size of the mainland livestreaming e-commerce market reached 433.8 billion yuan in 2019, and is poised to hit 900 billion yuan by the end of this year.
As of March, 560 million people — about one-third of the country’s population — were using livestreaming services, an increase of 163 million from late 2018, according to a report by China Internet Network Information Center. They included 265 million who turned to livestreaming for their shopping.
While the industry’s rapid growth has thrown a lifeline to cash-strapped businesses, experts and industry insiders have called for stricter regulation to ensure its healthy and sustainable development, citing business and legal risks.
Livestreaming e-commerce is undoubtedly a boon for Chinese merchants struggling to keep and expand their businesses in the current tough economic environment, but an industry’s sprawling rapid growth isn’t just a bed of roses, said Ma Shicong, a senior analyst with Beijing-based internet consultancy Analysys.
“For this emerging sector, the problems include false advertising, supply-chain mismanagement, vicious competition and so forth. And, there are also some ‘gray areas’ that businesses may tap into,” she said, warning that such loopholes could give rise to business and legal disputes.
“It’s paramount that the government and the industry work together to promote its healthy growth. While the government has to enact regulations quickly to cope with the market’s development, livestreaming platforms should upgrade their management,” Ma said.
Salespeople adopt livestreaming, an emerging retail channel, to sell products to customers. (PHOTO PROVIDED TO CHINA DAILY)
Relative legislation on the way
She urged livestreaming platforms to take full advantage of intelligent means to spot and reduce irregularities and create a sound online business environment.
According to a recent survey by China Consumers Association, nearly 40 percent of respondents said they were unable to get real experience of the products sold on livestreaming platforms; 25.7 percent said there’s a lack of specific laws and regulations binding the e-shopping process to safeguard their legal rights; and 24.2 percent lamented poor customer services or after-sales services.
Zhang Zhao’an, a deputy to the National People’s Congress and deputy head of the Shanghai Academy of Social Sciences, said there is a dearth of effective rules governing live-streaming e-commerce at present.
He urged the legislature to explain, or make adjustments to, legal applications as soon as possible, and encouraged regulators to develop a monitoring system against illegal acts and irregularities by using artificial intelligence and other new technologies.
Zhang made the proposals in May during this year’s “two sessions”, the concurrent meetings of the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference, the country’s top advisory body.
Mo Daiqing, a senior analyst at the Internet Economy Institute, said livestreaming e-commerce is becoming a new source of economic growth, and will be an indispensable marketing tool for brands and merchants.
“The new business model has seen a fast penetration rate against the backdrop of the pandemic, and is likely to grow further in future,” Mo said.
“Having seen rapid growth, the industry is approaching the stage of rebuilding. There’s an urgent need for market players from all sides to integrate deeper with each other and set up unified standards to better regulate and enhance the quality and efficiency of livestreaming.”
