China's State Administration of Market Regulation has published a draft law that will effectively apply e-commerce rules and regulations to social media and livestreaming platforms such as Douyin, Kuaishou, WeChat. The move comes as e-commerce activities on social media platforms have dramatically increased, raising concerns over the proliferation of illicit activities and the lack of proper oversight.
If the law is enacted, social media platforms will be subject to rules and regulations such as the mandatory monitoring of the qualifications of vendors. Products being sold on these platforms will also be strictly monitored to protect consumer rights and manufacturers' property rights. Owners of the social media platform will also be required to provide data and information when subpoenaed by authorities.
"Social networks, livestreaming and other platforms that provide vendors with business space and support services related to completing transactions such as product browsing, order generation and online payment ... should perform the responsibilities of e-commerce platform operators in accordance to the law," the administration said.
Since the start of the pandemic, the use of social media and livestreaming platforms for e-commerce purposes has skyrocketed. These types of platforms have become the fastest growing area for economic activity as more people go online to do business.
According to a report published by iMedia, livestreaming e-commerce in China had grown to about 443.8 billion yuan last year. This figure more than doubled to 916 billion this year as online traffic surged during the coronavirus pandemic.
The increase in e-commerce activity on social media has resulted in a growing number of complaints and concerns. This included the proliferation of fake or damaged goods, scams, lack of after-sales service, and missed deliveries. Without any proper oversight and social media companies unwilling to spend resources to resolve such issues, Chinese regulators have decided to step in to stop the problem from getting worse.
The new draft law was created through a collaborative effort between different private and government-run regulatory bodies. This included the China Advertising Association, the Professional Committee of Media Shopping of China, and the Chinese Chamber of Commerce.