Caixin
Oct 29, 2020 04:04 AM
FINANCE

China Warns of Risks in Livestreaming Sales of Financial Products

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What’s new: As China’s booming livestreaming retail industry penetrates markets from beauty treatments to financial products, the nation’s banking and insurance regulator issued a warning of major risks.

The China Banking and Insurance Regulatory Commission (CBIRC) in a notice Wednesday said some livestreaming operators don’t have the qualification to sell financial products and may engage in fraud and misleading practices.

Some livestreaming platforms use self-identified “financial management experts” or “insurance experts” to provide improper descriptions in marketing financial products, potentially misleading or deceiving audiences with poor financial knowledge, the regulator said.

The background: Livestream shopping, similar to the American TV shopping channel QVC, has developed since 2016 in China on platforms such as Alibaba Group’s Taobao and ByteDance Ltd.’s Douyin. Viewers buy goods online from influencers who show off their latest finds — from lipsticks to toilet paper — in real-time videos. The emerging form of retailing has grown into an industry worth an estimated $66 billion.

The Chinese government has voiced support for the industry, calling it the “new engine” of e-commerce growth and encouraging livestreaming as a solution to unemployment.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com).

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