The lie behind China’s billion-dollar livestream industry

Tram Ho

China’s livestream industry is booming as it attracts both young people and business people in this new way of selling. The story of rising stars on livestream platforms earning hundreds of thousands of yuan after each sale has become an inspiration to attract more and more people to this game.

But behind it are hidden corners that are hard for outsiders to know. Below is the confession from the people “in the profession” to better know what happened behind the top sales on the internet.

Fake virtual gifts

In 2018, when the Livestream industry in China exploded at the speed of light, Ms. Huang Xiaobing felt her livestreamer career coming to a dead end. She decided to open her own agency company in Tianjin, targeting the booming livestream sector, to manage online stars, who sing and dance in front of the audience to receive virtual gifts. convert to money.

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In her new role, she helps livestreamer become famous in front of a crowd of online audiences. One of the popular ways to achieve this is to impersonate viewers to buy virtual gifts for livestreamer to increase their popularity, fooling platforms’ algorithms into prioritizing these people’s channels. in recommended pages.

Each agency will spend about 3,000 to 5,000 yuan (about 456 USD to 760 USD) to fill chat windows with virtual gifts .” Huang said. At its peak, her company managed and trained 40 celebrities before she left the industry to stay at home as a housewife.

According to Huang, livestream channels will need to multiply their actual viewership by 10 to 50 times to get to the recommended page on platforms, from which they will have the opportunity to attract viewers and bonuses from real users. . To maximize profits, Huang said, her company does not buy gifts and create virtual viewers during every livestream, but only select a few livestreams they feel are most likely to bring in the most money.

Everyone does that

Everybody in the industry does it, one way or another .” Huang said. These platforms themselves sometimes inflate the metrics to give people a sense that their platform has a lot of users.

A prime example of this is the YY platform. An American short-seller Muddy Waters accused the Chinese social network of using computer bots to fake viewership and send virtual gifts to livestreamer in ” a billion-dollar scam ” . Muddy Waters claims 90% of YY Live’s revenue, YY’s livestream platform, is fake.

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Analysts say traffic fraud is an “open secret” for the entire internet industry, not just China’s booming livestream industry. This also appears on social networking platforms like Facebook or Twitter.

In addition to the livestream channel’s ranking tips on recommendation sites, Shanghai celebrity marketing platform Parklu says, livestreamer also gets commissions on sales – usually up to 20%. So they can use the virtual accounts controlled by the bot to buy products with their own money and refund up to 50% of these products, while pocketing the commission.

Everyone uses virtual traffic, from the big tech companies to the smallest KOLs (short for key opinion leaders) .” According to Parklu’s marketing director, Elijah Whaley. ” Everyone uses virtual traffic to some degree because it’s a way to deceive algorithms, people and brands. It’s an old but new way of doing it in this industry, on different layers . ”

However, only large-scale management companies can make this effective. ” They would need a network of many different channels with a ton of live streamers for this to work .” Whaley said. Even if the profit per livestreamer was lower, ” they don’t care because they’re streaming up to 8 hours per day for all 1000 livestreamer .”

During the recent Singles Day shopping festival, the Chinese Consumers Association received more than 334,000 complaints about e-commerce livestream platforms, a significant portion of them related to fake traffic and virtual orders.

On the Taobao page of Alibaba Group Holding, the largest e-commerce platform in China, the search with the keyword “live stream views” will feature a multitude of products that help “optimize the number of viewers” for owners. Weak descriptions are ambiguous products.

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A product listed on the platform offers 50 yuan in exchange for 100 virtual views and 5 yuan in exchange for 30,000 likes for livestreams on ByteDance’s Douyin platform – TikTok version for the Chinese market. If you spend 20 yuan, customers can also create virtual transaction notifications – which usually appear on the screen every time a transaction is made – that will continuously pop up during the livestream session every 3 to 5 seconds for 3 language. This will impress the viewer who buys the product.

A dark future for deception

But lately, Chinese regulators have begun to keep an eye on these behaviors and tighten regulations on the industry. Earlier this month, the China Cyber ​​Administration released a bill that prohibits “acts of fabricating or altering followers, viewership, likes, transactions and traffic volume. on livestream platforms.

Not only that, according to the new regulations of the National Broadcasting and Television Administration, the live streamers in China and those who want to give gifts must also register with their real names. Furthermore, the agency also stipulates that internet platforms have a limited responsibility for the number of bonuses each user can give.

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Alibaba Singles Day shopping event

Regulators also beat out bot service providers to generate fake traffic for livestream channels. In October, a person in Zhejiang province was fined 500,000 yuan for providing fake views, likes and comments to livestream channels of sellers on Taobao and e-commerce platforms. other death.

Despite the tightening regulatory requirements, analysts say, the sales and entertainment-oriented livestream platforms will continue to grow for the foreseeable future. While the Covid-19 pandemic forced many people to stay at home, work and shop from afar, it also increased the number of people joining the livestream industry.

According to the Ministry of Commerce of China, in the first half of this year alone, there were more than 10 million livestreams selling online in China, and attracting more than 50 billion views. These online sales campaigns have helped revive the retail sector in China as the domestic economy reopens.

With such strong growth this year and the fierce competition to climb to the top display positions in front of users’ eyes, it’s more likely that tricks to deceive the algorithm and overtake the rating system. continued popularity in the future, despite the strict control measures of the Chinese regulatory authorities.

Refer to SCMP

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Source : Genk