According to the new guidelines, there will be a daily cap on digital tipping and tighter censorship over product sales during live streaming in an aim to “promote the healthy development of the industry.”
The Cyberspace Administration of China, the State Administration of Tax and the State Administration for Market Regulation also pledged to eradicate crimes on such platforms including tax evasion.
China’s regulators has announced they will regulate live-stream e-commerce. Following this announcement, Kuaishou’s share prices faced a decline and triggered off trimming gains of tech shares.
The latest regulatory announcement has dampened the sentiment as investors were expecting China to loosen its grip following Vice Premier Liu He’s mid-March pledge to stabilize capital markets and end crackdowns on private enterprise.
Key player Kuaishou fell 6.2 percent yesterday to HK$7.36, reversing an earlier rally spurred by an earnings beat.
China’s internet watchdog, CAC, issued guidelines last year urging platforms to impose a cap on tipping but with no concrete restrictions.
Meanwhile, live-streaming industry has come under the spotlight for some time already. In terms of profit making practices in live-streaming. Case in point, one of China’s top live streamers Weiya was fined RMB1.3 billion due to tax evasion.
China’s live-streaming sector was estimated to be around US$30 billion in 2020.
Sentiment has also been fragile following a number of earnings misses by technology companies, including Tencent and Alibaba.
The 30-day volatility for the Hang Seng tech gauge is at a record high, as traders look for more clues on the sector’s earnings and regulatory outlook. The index jumped more than 30 percent from its trough two weeks ago.
The Hang Seng Tech Index ended up 0.3 percent in Hong Kong, having earlier risen as much as 2.3 percent.
