Teenagers in China have, on occasion, blown all their families’ savings on live-streaming performers. Local regulators were bound to notice. Tighter controls now ban minors from making virtual gifts on video-streaming platforms, as well as limiting spending by any single user.
There are also new curbs on online shopping via livestreams. That will interfere with one of the fastest-growing local retail trends. Shoppers are increasingly buying products real-time as they watch their favourite livestream performer try on an outfit or the latest make-up colours. Ecommerce giants Alibaba and JD.com have started to rely on live-streaming for growth this year.
Some local video-streaming companies will be particularly hard hit. Nearly half of the users of the second-biggest platform, Kuaishou, are teenagers. The Tencent-backed company earns most of its total revenue, more than two-thirds, from live-streaming. Most of that comes from virtual gift sales. Advertising and ecommerce are much smaller portions of sales, leaving Kuaishou the most exposed to the fallout.