Caixin Weekly | The Troubles of Live Streaming E-commerce 'Crashes' (AI Translation)

财新周刊｜直播电商“翻车”之困

[para. 1] In the midst of the traditional e-commerce platforms like Taobao Tmall, JD.com, and Pinduoduo launching their "Double Eleven" sales promotion in October, Kuaishou's top influencer Xinba announced his comeback with three videos. Xinba faced multiple account suspensions on Kuaishou but returned just in time for the sales event, commanding nearly 100 million followers. The "Xinba Family," his team of streamers, was a crucial force in Kuaishou's e-commerce sales. In 2022, they achieved a GMV of 50 billion yuan, 5.5% of Kuaishou’s total e-commerce GMV of 901.157 billion yuan. Though Xinba stopped disclosing specific GMV figures, his latest comeback saw daily sales of 64 billion yuan on October 19, a 70% increase from the previous year's Double Eleven event.

[para. 2] The growth of Kuaishou's e-commerce segment is slowing, with its GMV increasing by 94% year-on-year as of October 19. There's a shift from relying on top influencers to "mid-tier" broadcasters. During the Double Eleven event, over 16,000 livestream rooms surpassed the peak GMV from 2023. Meanwhile, Douyin, aggressively expanding its shelf e-commerce, saw transaction volumes rise by 93% year-on-year during the same period.

[para. 4] The 2024 "Double 11" event is a key market share battle for traditional e-commerce platforms against emerging platforms like Kuaishou and Douyin. With an uncertain consumer spending pattern, the industry views this event as indicative of macro consumption trends. Liu Bo of Taotian Group emphasized it as a moment to spur demand growth.

[para. 5] Despite controversies surrounding live-stream e-commerce content and products, major platforms continue to rely heavily on livestream channels. With eight years of development, the sector lacks a comprehensive regulatory framework, primarily resorting to fines or temporary bans for enforcement.

[para. 6] Wang Hai, a professional fraud buster, highlighted the challenges in enforcing compensation systems within the sector. Notably, small brands often use strategies of high commissions and vague language or false advertising, exploiting regulatory blind spots and loopholes.

[para. 7] Ensuring product quality via livestreams is challenging. Platforms, acting as regulatory frontlines, are deeply tied to the ecosystem and struggle to maintain independent oversight. The ambiguous nature of classifying livestream e-commerce as sales or advertising complicates legal liability and consumer recourse.

[para. 8] Xinba's account was suspended after a clash with Douyin's top streamer Xiao Yangge over fake exposes. Other live streamers like Luo Wangyu and Dongbei Yujie faced similar controversies, with accusations of false advertising and counterfeit products leading to account suspensions and penalties.

[para. 9] Platforms like TikTok and Kuaishou face stalled growth despite previously high growth rates. Douyin's MAUs increased slightly to 781 million, while Kuaishou's e-commerce GMV only grew 15% year-on-year in the second quarter of 2024.

[para. 12] Demands for self-discipline among anchors are rising, yet achieving self-regulation remains challenging. Despite stringent conditions and robust supply chain management claims, agencies often fail due to the high cost of testing, tight profit margins, and the difficulty in maintaining quality assurance.

[para. 15] Regulatory responsibility often falls on platforms legally bound to maintain consumer protection systems and resolve disputes. However, expecting platforms to shoulder the total burden of oversight might be unsustainable. Platforms prioritize the quantity of goods, resorting to a penalty-based approach for misconduct.

[para. 18] Cases like the "sugar water bird's nest" incident led to platforms ensuring consumer compensation, but only after significant public and regulatory pressure. Such instances have compelled hosts and their agencies to preemptively shoulder consumer liabilities, refunding buyers, and implementing stricter compliance measures.