In Depth: How Livestreaming Snake-Oil Sellers Exploit Advertising Loopholes

[para. 1] Wang Meng, suffering from acute gastroenteritis, discovered the influence health livestreamers like "Dr. Su" had on her mother, a retired nurse from Shandong province. Following tumor surgery, Wang’s mother became obsessed with health livestreams and had spent nearly 100,000 yuan on products from Dr. Su, advised by him rather than seeking professional medical help.

[para. 2][para. 3] The livestreaming e-commerce sector in China has grown rapidly, especially in the sale of health products. A report by Chanmofang stated that over 70% of health products on Douyin were sold through livestreams within a year. However, regulatory frameworks haven't kept up, leading to false advertising and misleading sales tactics with products often categorized wrongly as therapeutic.

[para. 4][para. 7] Amidst these concerns, platforms like Douyin are tightening policies to mitigate deceptive practices. However, sales continue via less-regulated spaces like WeChat groups. The marketing usually involves livestreamers portraying themselves as authoritative figures with high-pressure sales strategies, claiming exclusive offers and free returns to entice viewers.

[para. 5][para. 8] An example involves Li Wen's father who stopped his diabetic medication after buying and consuming "Shutang" powder from Kuaishou, influenced by claims that it allows diabetics to absorb sugar effectively. Despite the powder’s label stating it isn’t a health supplement or medicine, such deceptive practices continue largely due to high-pressure sales tactics on livestreams.

[para. 9] The big-data analysis between August 2023 and August 2024 by Beijing Sunshine Consumption Big Data Research Institute found around one-third of discussions about online health product sales involved false advertising. Concerns about misleading sales tactics and product quality were also prominent.

[para. 10][para. 12] According to a July report by Industrial Securities, e-commerce units sold 56% of dietary supplements in 2023, compared to 14.4% in 2013. Livestreams on platforms like Douyin are a key growth driver, offering real-time product explanations that foster consumer trust. Influencer-led sales accounted for approximately 65% of all health product livestreams within a year.

[para. 11][para. 13] However, influencer partnerships involve significant costs, including platform commissions and high fees for showing products. Despite high costs, influencers can charge significant sums, as their recommendations carry considerable weight with their dedicated fan base.

[para. 14][para. 15] Regulatory ambiguity presents challenges. While professional medical workers are banned from selling products for personal gain, independent health influencers face less stringent regulations, despite lacking formal medical credentials. Livestreams exist in a gray area, complicating resolution in cases of false advertising given the real-time nature of streams.

[para. 16][para. 18] Legal constraints, such as fines under the Anti-Unfair Competition Law, seem insufficient to deter major influencers. Some livestream platforms adopt a "loose-entry, strict-exit" approach, with penalties for violations. Douyin, aiming to combat exaggerated medical claims, has introduced bans on phrases like "miracle doctor."

[para. 17][para. 19] Exploiting regulatory gray areas, sellers often move to private domains like WeChat for less-supervised sales, using public platforms primarily as funnels. To curb such deceptive practices, major cities like Beijing and Shanghai have issued compliance guidelines; however, national legislation is necessary to protect health-anxious consumers effectively.

[para. 20] Wang Meng and Li Wen's names in the article are pseudonyms, contributing to illustrating the intricate challenges of health-related livestreaming e-commerce in China.