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E-commerce live-streaming in China: do you know the regulations?

In the pandemic era, live-streamed e-commerce in China has become critical to marketing. Taobao Live, Kuaishou, and Douyin have emerged as major e-commerce and short-video APP that have attempted to combine the two industries. A huge number of online show live broadcasts and e-commerce live broadcasts have arisen, becoming a very active and important phenomenon in the Internet economy. Several new regulations were rolled out at the end of last year. We summarize them.

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The State Administration for Market Regulation

Guiding Opinions of the State Administration for Market Regulation on Strengthening the Supervision of Webcast Marketing Activities

市场监管总局关于加强网络直播营销活动监管的指导意见 (November 6)

  • Consolidate the legal responsibilities of three types of subjects (platform, merchant, live streamer)

  • The use of live broadcast sales of goods or services must be legal (e.g. do not sell goods or services that are prohibited from online trading)

  • Publicize relevant information to protect consumers’ right to know and choose

  • Special advertisements (e.g. medicine) need to be reviewed before they are released

  • 8 types of live broadcast violations will be investigated and punished according to law

o Violations of intellectual property rights.

o Food safety violations, including unqualified sales of food, sales of foods that do not meet food safety standards, and sales of foods with false production dates or expiry dates.

o Advertising violations such as publishing false advertisements, publishing illegal advertisements that violate social good habits, and illegal advertising endorsements.

o Price violations such as price bidding, using false or misleading price methods.

o E-commerce illegal acts, e.g. unauthorized deletion of consumer reviews.

o Illegal acts violating the legitimate rights of consumers, e.g. replacements, returns, etc.

o Illegal acts of unfair competition, e.g. web-casters deceiving and misleading consumers, illegal rewarded sales, etc.

o Product quality violations such as adulterated products, sale of fake products as genuine, substandard products as qualified products, etc.

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National Radio and Television Administration of China

Notice on Strengthening the Management of Online Show Live and E-commerce Live Broadcast

(关于加强网络秀场直播和电商直播管理的通知) (November 24)

  • Live broadcasting platforms and e-commerce live broadcasting platforms must adhere to the right direction of giving priority to social benefits, be value-oriented, actively spread positive energy, show the truth, goodness, and beauty, also according to the characteristics and age of the audience. Avoid show off wealth and spread of unhealthy practices.

  • Live streaming platforms should implement real-name management for their hosts and users. Minors and those who don’t register with their real names should not be allowed to tip hosts. Users’ maximum tip or reward should also be limited by the platforms. Platforms should not use tactics that induce users to offer hosts illogical rewards or tips.

  • Live streaming platform should implement label classification management of the program content and corresponding streamers, and classify them (e.g. music, dance, fitness, etc. labels).

  • Live streaming platform shall establish a score for the live broadcast room and live streamers, refine the program quality score and violation scoring level, and link the score with the recommendation and promotion.

  • The e-commerce live broadcast platform shall conduct relevant qualification review and real-name certification for merchants and individuals that open live broadcasts to sell products, and keep complete review and certification records.

  • The e-commerce live broadcast platform must strictly follow the relevant regulations of online audio-visual program service management, and must not produce other audio-visual programs beyond the scope of e-commerce. To organize thematic e-commerce activities such as e-commerce festivals in the form of live broadcast rooms, live performances, etc. the activities shall be submitted 14 working days in advance. Information about guests, live streamers, content, settings, etc. shall be reported to the competent radio and television authorities.

  • Live broadcasts and e-commerce live broadcast platforms should actively explore the use of new technologies such as big data and AI, let algorithms support the promotion of high-quality audio-visual content, and realize accurate warning and control of illegal and bad content. For live broadcast rooms with high click volume, false high volume, large “reward” amounts, and business categories that are prone to problems, it is necessary to establish a human-machine integrated key monitoring and review mechanism to track program dynamics, analyze public opinions, and reasons, to prevent guiding deviations and problems.

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The State Administration for Market Regulation

Measures for the Supervision and Administration of Online Transactions

网络交易监督管理办法 (March 12)

  • When collecting and using consumer personal information, merchants shall follow the principles of lawfulness, fairness, and necessity, clearly state the purpose, method, and scope of information collection and use, and obtain the consent of consumers. (one-time general authorization, default authorization, binding with other authorizations are prohibited).

  • Merchants shall not deceive or mislead consumers by making false or misleading commercial propaganda (e.g. fake reviews).

  • Merchants shall follow the principles of voluntariness, equality, fairness, and good faith, abide by laws, regulations, rules and business ethics, public order and good customs, participate in market competition fairly, earnestly perform statutory obligations, actively assume main responsibilities.

  • If the information publicized by merchants changes, the updated publicity shall be completed within ten working days.

  • Merchants shall not fabricate or spread false or misleading information that can damage the commercial reputation and products reputation of competitors.

  • Merchants shall not send commercial information to consumers without the consent or request of consumers.

  • Before consumers accept an automatic renewal service, the merchant must prominently notify consumers of the renewal five days before the date of automatic renewal and allow consumers to choose whether to renew the service. During the service period, consumers should be provided with a simple option to cancel or change the service at any time, and no unreasonable fees should be charged.

  • Merchants shall disclose product or service information comprehensively, truthfully, accurately, and promptly to protect consumers’ right to know and to choose.

  • Merchants who carry out online trading activities through online social networking and live broadcasting shall display products or services, their actual business entities, after-sales service, and other information prominently.

  • The webcast service provider saves the live video of the online trading activities for no less than three years from the end of the live broadcast.

Note: If an individual engages in online trading activities and the cumulative annual transaction volume does not exceed 100,000 yuan, registration as a market entity is not required. Where the same operator opens multiple online stores on the same platform or different platforms, the transaction volume of each online store shall be combined. Where an individual engages in sporadic small-value transactions that require administrative permission by the law, the market entity registration shall be handled following the law.

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Office of the Central Cyberspace Commission

Administrative Measures for Online Live Marketing (for Trial Implementation)

网络直播营销管理办法(试行)(April 23 — into effect on May 25)

  • Minors over the age of 16 who apply to become live streamers shall obtain the consent of their guardians.

  • Publishing false or misleading information to deceive or mislead users, marketing counterfeit and shoddy products, infringing intellectual property rights, or not meeting the requirements for protecting personal and property safety, falsifying data traffic, harassing, slandering, insulting, and intimidating others, fraud, gambling, sales of contraband and controlled items, etc. are forbidden.

  • The Livestream “room” should be set up and managed and must not mislead users. (set up the room as account name, profile picture, title, and cover; management of the room as dress and image of the live streamers, etc.)

  • Real-time management of interactive content such as voice and video connections, comments, and not deceive or mislead users by deleting or shielding relevant unfavorable reviews.

  • Legitimate and reasonable requests made by consumers cannot be deliberately delayed or refused without justified reasons.

  • To use other people’s portraits as virtual images to engage in online live broadcast marketing activities the consent of the portrait right holder should be obtained

Note: Due to the length of the regulations of “Administrative Measures for Online Live Marketing” we have summarized only the parts related to brands/1operators of live broadcast and live streamers omitting the regulations for the live-streaming and e-commerce platforms.

1The operators of live broadcast rooms mentioned refer to individuals, legal persons, and other organizations that register accounts on the live broadcast platform.

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Source; 网经社, 网络视听节目管理司, scmp, 市场监管总局, China Daily

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