(ECNS) -- E-commerce companies are increasingly using live video streaming as a strategy to attract buyers, but this business model does not look promising to some experts as China's media watchdog issued a new regulation on Sept. 9 that requires online programs to have a broadcasting license.
The new marketing stunt became popular in China this year with major e-commerce companies using online broadcasts.
Tmall.com and Suning.com, two of the country's major players in e-commerce, have both started programs that allow viewers to place orders for goods recommended by online broadcasters, most of them Internet stars, while watching online content. JD.com said it also has such plans.
The approach has been so successful that sales of a brand of biscuits were six times higher than usual after they were featured in online broadcasts, said Tmall, run by Alibaba.
Insiders say live e-commerce broadcasting provides a good opportunity for followers to communicate with their Internet icons, which also increases online traffic to websites.
Li Yi, a researcher with the Internet Society of China, doubts its long-term viability. It is just a variation of conventional TV shopping on the Internet, it was said.
"It can help e-commerce platforms accumulate users in the short term and stimulate purchasing," Li explained. "But it may not form a stable business model in the long-term after the fad fades."
To regulate the market, the State Administration of Press, Publication, Radio, Film and Television has required that live online broadcast operators hold a license, which could be a big hurdle in future, insiders noted.
