Buying and selling on the go

Livestreaming e-commerce needs to be improved to better protect the rights and interests of consumers 

Livestreaming has developed into a profitable e-business. According to available data, more than 10 million e-commerce livestreaming events with 400,000 active hosts and 50 billion views were recorded in the first half of this year. The strict prevention and control measures to contain the novel coronavirus epidemic helped transform livestreaming e-commerce into a new force in the digital economy, boosting consumption and providing employment.

Livestreaming is a method of data transmission, delivery of video files in real time, often from a remote storage location, so clients don't have to download the entire file before playing it. Apart from allowing users to watch videos in real time, livestreaming also enhances users' shopping experience and simplifies the shopping process. Thanks to the advancing of the government's "Internet Plus" initiative, which integrates the mobile internet, cloud computing, big data and the internet of things, livestreaming has developed into a flourishing e-commerce industry.

E-commerce was mentioned three times in the 2020 Government Work Report－to help contain the pandemic, promote consumption, and stabilize foreign trade. Also, in its recent notice on the publicity of the new career information, the China Employment Training Technical Instruction Center listed livestreaming salespersons under the new category of "internet marketer", which means livestreaming is now a formal occupation.

But in practice, many problems such as livestreaming e-commerce resources flowing to the few popular hosts, similarity of content, and the inadequate supervision are constraining the development of the livestreaming industry. When it comes to hosts, the "Matthew effect" (the rich becoming richer and the poor poorer) is evident in livestreaming e-commerce.

The gradual homogenization of livestreaming content is worrying, while platform content screening is overmechanized. Another serious problem is blurring of features on livestreaming platforms. If platforms push content based on ranking, which depends only on the number of views and likes－or dislikes－the hosts' ranking will remain stable, leaving the content unchanged, and thereby limiting the possibility of users selecting what they want to watch and enjoying it.

Further, to build a brand, a company should have a long-term strategy, but the immediacy of livestreaming e-commerce does not allow companies to work out long-term development plans. When strict measures, including restrictions on movement, were imposed to contain the spread of the novel coronavirus, much offline commercial consumption stopped, so selling the goods in stock through livestreaming was the best way for companies to continue earning revenue. Plus, livestreaming has the added advantage of generating large numbers of orders in a short time and therefore promoting consumption growth. However, it might not boost demand in the long run.

Besides, there is the problem of false publicity. To pursue higher profits, some hosts exaggerate the utility of their products, luring consumers to buy impulsively. According to a China Consumers' Association report on consumer rights protection, more than 110,000 complaints were lodged by consumers during the "618" shopping festival, regarding problems such as excessive publicity of product efficacy and sale of fake and shoddy goods.

Therefore, it is necessary to improve livestreaming e-commerce.

First, we should support businesses with not-so-popular livestreaming hosts, so as to prevent most of the resources from flowing toward the top, popular hosts and to promote the healthy development of the industry.

Second, there is a need to encourage ordinary businesses to produce professionally generated content to optimize e-commerce platforms' content screening mechanism. Content is the most important factor in the livestreaming industry; as such professional content can boost a product's commercial value and attraction.

And by developing systematic courses, livestreaming platforms can help even ordinary businesses to come up with professional content. For example, in early August, Tmall New Products Innovation Center joined Taobao University to help small and medium-sized brands to better understand digital incubation and new product operation from the perspective of consumers and brand operation. By expanding their professionally generated content capacity, ordinary businesses can address the problems of content homogeneity and the blurring of features on livestreaming platforms.

Third, it is important to reconstruct the digital supply chain through "livestreaming e-commerce + brand". Due to the pandemic, some businesses have resorted to e-commerce to sell their stock in hand. But this is a temporary measure, which will not help these businesses build their own brands or publicity platforms, because a brand content ecosystem should have a unique long-term value so as to boost consumption in the long run.

Fourth, we should build a comprehensive supervision system for livestreaming e-commerce. With the rapid growth of industry, the regulatory authorities should establish a mechanism to settle commercial disputes, and set up a database of professionals who will regularly explain the livestreaming industry's policies, which, along with access to the accounts of livestreaming companies, will allow consumers to make informed decisions.

And as for livestreaming audiences, they should learn to resist the temptation to buy everything on sale. After all, well-informed, rational consumers can be the catalyst for the livestreaming industry to improve.

The author is a policy analyst at the Institute of Public Policy at South China University of Technology. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.