On June 8, 2020, Professional Committee of Media Shopping, China General Chamber of Commerce released two drafts of Group Standards: Basic Standards of Video Live Shopping Operation and Service [3] and Guidelines for the Evaluation of Service System of Online Shopping Integrity [4]. Both texts are expected to be implemented in July 2020. The public consultation will last until June 30, 2020. Any suggestions can be mail sctric@126.com.
Video live shopping operation and service
The first standard clarifies the requirements on industry terms and definitions, product quality, software and hardware, codes of conduct for live streamers, service specifications for multi-channel network organizations, the operation management of industrial enterprises, platforms’ compliance, the supervision and administration of regulatory authorities, etc.
– Product Quality. The products sold by live streaming should meet the requirements of national laws and regulations for product quality, standards, and measurement, and have production and sales permit certification, product quality certification, etc. Cosmetics, beauty products, medicines, health care products, etc. should also have the ID number of relevant approval documents, manufacture date, shelf life, and precautions.
– Promotion. The terms used by live streamers need to comply with the Advertising Law. "The lowest price in the whole network (全网最低价)," "national level (国家级)," " superlative (最高级)," "best (最佳)" or similar comparative words are illegal terminology.
– Practitioner Qualification. Live streamers and other relevant personnel need to participate in training organized by relevant departments, obtain qualification certificate or working & operation certificate, and register in professional institutions.
Sun Zhisheng, Secretary-General of the Professional Committee of Media Shopping, China General Chamber of Commerce and leader of the Standards Formulating Working Group, said that the formal standards will make clear explanations on how to obtain qualifications and certifications [5].
Online shopping integrity
The second text clarifies the basic requirements, operating principles, and management, social supervision, evaluation index system, evaluation level, and procedures of enterprise integrity management in the online shopping industry.
Supervision needed
According to statistics from the Ministry of Commerce [6], in the first quarter of 2020, there were more than 4 million live streaming e-commerce channels across the country. Regulation of the sector has failed to kept pace with developments in the industry. Problems such as vulgar contents, fake data of likes, sharing, watching and transaction volume, false and exaggerated promotion, unqualified products, and poor after-sales service are major challenges facing the sector.
A report on consumer satisfaction on live streaming e-commerce released by the China Consumer Association on March 31, 2020, showed that 37.3% of consumers surveyed had encountered problems in live streaming e-commerce [7]. The main concerns for refusing live streaming e-commerce are "product quality is not guaranteed " and "poor after-sales service."
“Live streaming solves the problem of supply and marketing for enterprises, but once problems occur, it’s difficult to protect consumers’ rights due to the lack of management standards and supervision mechanisms,” commented Li Yougang, deputy director of the Expert Committee formulating the Group Standards [8].
Industry comments
From the industry perspective, commentator Zhang Shul believes that the newly released Group Standards will have a positive impact on live streaming e-commerce [9]. “The disorder in the live streaming e-commerce industry even makes enterprises unclear how to choose a live streaming platform. Second- and third-tier brands and enterprises need standards to protect their rights and interests, and define their responsibilities and obligations.”
Zhao Kun, general manager of Guangzhou Pinhe Biotechnology Co., Ltd., said, "Under supervision, cosmetics live streaming e-commerce may have a short adaptation period, but standardized live streaming e-commerce will get more traffic in the future." [10]
Legal professionals pointed out that the Group Standards do not have the mandatory effect of laws and regulations [11]. The impact of the Group Standards depends on whether the China General Chamber of Commerce has the right to punish violations.
Sun Zhisheng, Secretary-General of the Professional Committee of Media Shopping, China General Chamber of Commerce and leader of the Standards Formulating Working Group, responded that the establishment of the Standards has referenced to laws such as the Advertising Law, Consumer Rights Protection Law, Radio and Television Advertising Broadcasting Management Measures, etc. If practitioners violate existing laws, they will be punished by relevant departments [12].
Going forward the Professional Committee of Media Shopping, China General Chamber of Commerce will increase cooperation with the Ministry of Public Security, the Ministry of Commerce, the General Administration of Customs, State Administration for Market Regulation, etc. and establish a blacklist and a national supervision and reward system [13].
