China’s livestream e-commerce industry has experienced explosive growth in recent years, which has revolutionized traditional retail models by combining information dissemination, real-time interaction, instant purchasing and even the entertainment.
In the first three quarters of 2024, total retail sales in China amounted to 35.36 trillion yuan, up 3.3 percent year-on-year. Over the same period, online retail sales in China totaled 10.89 trillion yuan, up 8.6 percent year-on-year. Of that amount, online retail sales of physical goods reached 9.07 trillion yuan, accounting for 25.7 percent of total retail sales, up 7.9 percent year-on-year.[1] In particular, both the “Double Eleven” (Nov 11) shopping festival and the midyear “618” shopping carnival, mark the continuous rise in online sales revenue each year.
However, this rapid expansion has been accompanied by numerous regulatory challenges, including false advertising, counterfeit goods, and consumer rights violations. In response, China’s State Administration for Market Regulation (“SAMR”) and the Cyberspace Administration of China (“CAC”) jointly issued the Regulations for the Supervision and Administration of Livestream E-commerce (Draft for Comment) (“the Draft Measures”) on June 10, 2025, with public opinion being solicited till July 10, 2025. The Draft Measures employ approaches to addressing unique challenges posed by this emerging business model, representing a significant step toward comprehensive regulation of this dynamic industrial sector.
I. Dual Governance Mechanism Addressing Regulatory Challenges of Livestream E-commerce
The rapid expansion and rise of livestream e-commerce has been accompanied by significant regulatory challenges, such as false advertising and exaggerated claims, sales of counterfeit and substandard products, price manipulation and even the data fraud.
These issues have prompted regulatory responses at both local and national levels. At the national level, relevant provisions in (i) the E-commerce Law of the People’s Republic of China (“PRC”), (ii) the Measures for the Supervision and Administration of Network Transactions and (iii) the Guiding Opinions on Strengthening the Standardized Management of Network Live Broadcasting can be applicable to governance and compliance matters for livestream sales.
Additionally, prior to the Draft Measures, several provinces and municipalities have already implemented local regulations or guiding rules. For instance, Hangzhou’s Livestream E-Commerce Industry Compliance Guidelines (“Hangzhou Guidelines”) have been published on the website of Economy and Information Technology Department of Zhejiang Province on June 24, 2024.[2] Although it is expressly stated in Hangzhou Guidelines that such guidelines are advocacy and guiding opinions and cannot be directly used as the basis for administrative law enforcement,[3] detailed provisions in Hangzhou Guidelines can provide relatively clear guidance to livestream e-commerce participants in such vibrant e-commerce region as well as China’s first pilot zone for cross-border e-commerce.
However, with the rise of livestream e-commerce and emergence of new business model in such industrial sector, it is pivotal to stipulate a specific regulation tackling legal risks and navigating compliance guidance in this field.
The Draft Measures establish a coordinated oversight framework involving both SAMR and CAC along with their local counterparts for better implementing the principle of integrating online and offline supervision. To be specific, SAMR and its local counterparts: primarily responsible for transaction integrity, protection of consumers’ legal rights, product quality monitoring, and fair competition. CAC and its local counterparts: focusing on content governance, data security, and online behavior regulation.[4]
Detailed approaches of such dual governance mechanism are reflected in the following provisions of the Draft Measures:
- Hierarchical Supervision: Livestream e-commerce platforms must classify live streams by influence level, applying appropriate scrutiny.[5]
- Information Sharing: Mandatory data reporting enables coordinated enforcement across domains.[6]
- Joint Investigations: Both agencies can require platforms to act against violators.[7]
II. Framework and Key Components of the Draft Measures
As mentioned above, the Draft Measures represent the first comprehensive national-level regulatory framework specifically targeting livestream e-commerce. The Draft Measures are structured in seven chapters with fifty-seven articles, aiming to establish clear responsibilities and obligations for all participants in the livestream e-commerce ecosystem.
(i) Main Regulatory Targets and Their Compliance Obligations
Distinct responsibilities and obligations of each regulatory targets are set below:
(ii) Supervision Approaches and Penalty Mechanisms
The Draft Measures creatively integrate existing legal frameworks while addressing live streaming-specific issues.
(a) Incorporation of existing laws
The Draft Measures explicitly reference multiple established statutes:
- E-commerce Law: For platform responsibilities regarding merchant vetting and transaction record-keeping.[21]
- Price Law: Prohibiting deceptive pricing strategies like artificial price inflation before discounts.[22]
- Advertising Law: Governing host endorsements and product claims, albeit with adaptations for livestream’s dynamic nature.[23]
- Anti-Unfair Competition Law: Addressing false transactions, fabricated reputation, and misleading commercial promotions.[24]
(b) Innovative penalty provisions
While leveraging existing laws, the Draft Measures introduce tailored penalties:
- Platform liability for failure to cooperate with investigations, with penalties up to 100,000 yuan.[25]
- Fines ranging from 5,000 to 50,000 yuan for violations like inadequate product vetting by livestream room operator.[26]
- Fines ranging from 5,000 to 50,000 yuan for failure to establish rigorous commodity selection mechanism, pre-review mechanism for hosts’ information or livestream error correction mechanism by livestream marketing service agencies.[27]
- Cross-platform enforcement through blacklist systems to prevent violators from simply migrating to other platforms.
III. Special Provisions Dealing with Novel Challenges
(i) High-Impact Livestreams
Recognizing the disproportionate influence of top livestream hosts, the Draft Measures introduce differentiated supervision:
- Enhanced Monitoring Requirements: Platforms must implement “dynamic technical monitoring, manual live monitoring, real-time inspections, and extended content preservation periods” for streams with large audiences, high transaction volumes, or influential hosts.[28]
- Stricter Compliance Standards: Major hosts may have to face more rigorous oversight, including potential “human/manual monitoring” during broadcasts.[29]
- Accountability Escalation: Violations by high-profile hosts may trigger cross-platform blacklisting, significantly increasing compliance risks.[30]
(ii) AI[31] Applications in Livestreaming Sales
In recent years, Chinese retail players have invested heavily in generative AI to increase sales and lower costs, as well as enhance customer services during promotions. Those retailers normally master generative AI in three key areas — deepening customer engagement, turbocharging productivity and cost savings, and finding new growth beyond trade, which can further energize customer retention efforts, enabling e-commerce players to hyper-personalize their engagement with consumers and create bespoke shopping experiences for them.[32]
Notably, the Draft Measures signify one of China’s first attempts to regulate AI applications in e-commerce industry, specifically addressing the following issues:
These provisions aim to harness AI’s efficiency benefits while mitigating risks of deception brought by the AI application in livestreaming sales.
IV. Prospects and New Trend on Livestream E-commerce Governance
In this year’s Government Work Report, China listed vigorously boosting consumption and expanding domestic demand across the board as key priorities for 2025. The Draft Measures represent a sophisticated attempt to address the unique challenges of this rapidly evolving sector. By clarifying participant responsibilities, introducing differentiated supervision for high-impact streams, creatively incorporating existing laws, and pioneering AI governance, the framework aims to transition the industry from its so-named “wild growth” stage to sustainable and high-quality development.
In addition, the Draft Measures seem to embrace the “regulatory governance” alternative proposed by some legal scholars,[36] emphasizing the following methods:
- Real-Time Monitoring Over Pre-Approval: Shifting from front-loaded content reviews to dynamic oversight during broadcasts.
- Application of Information Tools: Leveraging data disclosure requirements and credibility indicators to empower consumer choice.
- Platform-Mediated Governance: Assigning platforms central roles in enforcing standards through technical means like AI monitoring.
This transition reflects an understanding that live streaming’s value lies partly in its spontaneity—a quality that excessive pre-approval would stifle. By focusing on ex-post accountability and platform-assisted oversight, the Draft Measures seek to balance innovation with consumer protection.
Ultimately, the Draft Measures’ success will depend on implementation—whether they can reduce deceptive practices without stifling the creativity and accessibility that made livestream e-commerce revolutionary. If properly calibrated, this regulatory framework could establish China as a global leader in digital commerce governance while ensuring the sector’s long-term vitality. However, it’s encouraging to see another significance step being taken to shape a healthy and favorable livestreaming sale environment and there is no doubt that the issuance of the Draft Measures will serve as a good start for guiding the business operators and participants of livestreaming sales about how to behave orderly, which in turn can better safeguard consumers’ legal rights and benefits as well as supporting the healthy and sustained development of Chinese e-commerce ecosystem.
As the deadline soliciting public comment approaches, marketing players in this field should consider how the draft might further refine its balance between innovation facilitation and consumer protection—perhaps by clarifying small business compliance pathways or enhancing provisions against algorithmic manipulation.
[1] See Zhu Wenqian, Strong sales for high quality livestreaming, China Daily (October 19, 2024).
[2] The Chinese version of full text of Hangzhou Guidelines can be referred to the following link: https://zj87.jxt.zj.gov.cn/zlzq/web/views/law/law-guide-detail.html?id=242831.
[3] See article 50 of Hangzhou Guidelines.
[4] See article 4 of the Draft Measures.
[5] See article 7 of the Draft Measures.
[6] See article 13 of the Draft Measures.
[7] See article 40, 41, 43 and 45 of the Draft Measures.
[8] See article 6 and 16 of the Draft Measures.
[9] See article 7 and 14 of the Draft Measures.
[10] See article 8 and 19 of the Draft Measures.
[11] See article 11 of the Draft Measures.
[12] See article 17 and 18 of the Draft Measures.
[13] This can be referred to as agencies of Multi-Channel Network (“MCN”).
[14] See article 24 of the Draft Measures.
[15] See article 27 and 28 of the Draft Measures.
[16] See article 29 of the Draft Measures.
[17] See article 33 of the Draft Measures.
[18] See article 31 and 34 of the Draft Measures.
[19] See article 36 of the Draft Measures.
[20] See article 37 of the Draft Measures.
[21] See article 48 of the Draft Measures.
[22] See article 52 of the Draft Measures.
[23] See article 53 of the Draft Measures.
[24] See article 55 of the Draft Measures.
[25] See article 49 of the Draft Measures.
[26] See article 51 of the Draft Measures.
[27] See article 54 of the Draft Measures.
[28] See paragraph 1 of article 11 of the Draft Measures.
[29] See paragraph 2 of article 11 of the Draft Measures.
[30] See article 14 of the Draft Measures.
[31] AI stands for artificial intelligence.
[32] See Fan Feifei, Tech products, AI services drive Singles Day sales, China Daily (November 12, 2024).
[33] See article 18 of the Draft Measures.
[34] See article 28 of the Draft Measures.
[35] See paragraph 1 of article 30 of the Draft Measures.
[36] See Liu Xiaochun: The Regulating Governance Shift in the Construction of Platform Trust Mechanism — From the Perspective of the Conflict between Livestream Sale and the Application of Advertising Law, Administrative Law Review, no. 2, 2025.