(Yicai) Jan. 8 -- China is tightening oversight of its livestream e-commerce industry, which processes more than CNY4.5 trillion (USD644.1 billion) in transactions a year, and has issued new rules that, for the first time, regulate artificial intelligence-generated content including virtual anchors.

The Supervision and Administration Measures for Livestream E-Commerce include new technologies such as AI digital avatars and AI-generated videos in the regulatory framework. 

The measures, which were released by the State Administration for Market Regulation and the Cyberspace Administration of China yesterday, require AI hosts to be clearly labeled and to constantly remind consumers that they are produced by AI.

The new measures clearly define the legal responsibilities of livestream e-commerce platforms, livestream channel operators, hosts and multi-channel network agencies. Platforms are required to verify qualifications, submit information and deal with any illegal activities.

Livestream channel operators must improve information disclosure, identity verification and pre-compliance reviews while MCN agencies need to standardize how they recruit, train and manage hosts and fulfill verification responsibilities in commercial partnerships and product selection. 

To address the long-standing problem of click farming, the rules explicitly ban misleading promotions through fake transactions, false reviews and other means. 

The measures align with the hopes of many brands to return the focus of competition back to the product and reduce overreliance on internet marketing, 21st Century Business Herald reported, citing Wu Di, a partner at Unique Capital. At the same time, the role of AI in boosting efficiency across e-commerce, from product selection and customer service to content creation, deserves recognition. 

The gross merchandise value from livestream e-commerce is estimated to have exceeded CNY4.5 trillion (USD644.5 billion) in 2024, accounting for nearly one third of online sales and contributing 80 percent of the sector’s growth, according to a report by the State Administration for Market Regulation’s Development Research Center. 

More than half of the industry’s total GMV now comes from merchants’ own live-streaming channels, the report said. AI technology is widely used in these sessions with round-the-clock AI hosts helping vendors significantly cut costs.

Editor: Kim Taylor