China Digital Advertising Regulations All Brands Need To Know
8 Oct , 2020
China is well-known for its strict rules on the Internet. If you are new to digital marketing in China, please do check out this article to learn more about the online marketing regulations in China. Understand the regulations might avert ineffective digital marketing campaign, deleted and banned marketing accounts, or even violation of law!
Overview of China Digital Advertising Regulations
1. Paid advertisement should be clearly stated in China
China advertising regulation requires online advertisers to clearly state the nature of a paid advertisement. It should be clearly distinguishable and should be marked with indications in a prominent area.
This measure has an influential effect on social media marketing, which businesses that utilize KOL advertising need to pay extra attention on. A lot of marketers often pay KOLs to update social media platforms to promote the business' products and services indirectly, without stating the nature of the advertisement being paid.
The State Administration for Industry and Commerce in China has issued the Interim Measures for the Administration of Internet Advertising, which includes statement that KOLs and celebrities should clearly state “advertisement” on social media platforms for any commercial ads.
Netizens have been complaining about KOLs performing misleading advertisements by claiming the product endorsements are genuine recommendations, and later discovered that the KOL is getting paid to advertise the products. The public is deceived to purchase the same product for the enjoyment that the KOL claimed to experience when consuming it. With the regulation, the public can seek for more sincere product recommendations online.
2. China digital advertising wordings are regulated
2.1. Extreme digital advertising wordings in China
Superlative wordings are banned in China advertisements, including words like "the best", "the cheapest", "first of China", or "top-selling", and more. If marketers include these extreme words, they might face a penalty and be fined between 200,000 RMB and 1 million RMB.
One famous example is the Chinese technology company Smartisan. The founder Lou Yonghao was accused for stating his products being "the cheapest online" while they are actually more expensive than products on other platforms like Tmall or Jingdong. For example, while digital recording pen is sold 2448 RMB on Lou's platform, it was only 2398 RMB on other e-commerce platforms. He was especially being called out by China Consumers' Association for his misleading claims.
2.2. China digital advertising wordings regarding timeframe
Limited time offer is a great way to tempt consumers to purchase the products. But make sure to state clearly on the campaign end time specifically. Wordings such as “campaigns end anytime” or “price increasing/ decreasing in near future” is prohibited.
2.3. China regulation of false claim on the effect for cosmetic goods
China also bans exaggerating descriptions on the effect for cosmetic or skincare goods.
According to “Cosmetics Labeling Management Regulations”, “Cosmetics Naming Regulations”, and “Cosmetics Naming Guidelines”, wordings that include but not limited to below categories are not allowed:
1. Absolute wordings, e.g. “best”, “highest level”
2. False wordings
3. Exaggerated wordings
4. Medical terms, including words that express or imply medical effects and results
5. Names of medical professionals
6. Drugs approved by the Government
7. Terms that are unrelated with characteristics of the product, and that consumers have difficulty to understand
8. Vulgar wordings
9. Superstitious wordings
10. Descriptions unrelated to products’ characteristics
For example, the king of FMCG industry, P&G, once created an advertising slogan “teeth are whitened after a day” back in 2015. It was considered as a false advertisement and was fined for 6.03 million RMB. Therefore, you should double check your wordings used for marketing campaigns to avoid heavy fines.
2.4. Product description should be clearly stated in China
According to the Advertising Law by the People’s Republic of China, it states that “if were to include the descriptions of products in the advertisement, descriptions should be accurately and clearly stated. Including but not limited to products’ performance, functions, origin, application, quality, price, manufacturer, expiration date and consents; or services’ details, service provider, form, quality, price and consents.”
Also, whenever the advertisement indicates giveaway campaigns, the free gifts’ or services’ categories, specifications, quantity, campaign’s expiration date, and form of delivery should be clearly stated.
China Live Streaming Regulations
Louis Vuitton’s one-hour livestream on China’s Xiaohongshu
Live streaming has become the major source of revenue, especially in the retail industry, ever since the start of COVID-19 pandemic. A lot of businesses choose this form of marketing to make up the loss of sales for face-to-face sales. With the rise of live streaming e-commerce, more areas need to be addressed to prevent any loopholes for inappropriate trade practices, or even cybercrimes.
To regulate live streaming activities, China Advertising Association published a notice regarding regulations on live streaming marketing in July 2020. Now let’s take a look at a few common mistakes that you might overlook when practicing live streaming marketing in China.
1. China forbids view-botting/ fictitious number of purchases
The higher the number of views are, the more exposure the live stream is. Therefore, some online sellers or KOLs might pay for more views to attract more actual viewers to engage in the live stream e-commerce activities. But that has been marked as illegal in China now.
Banning view-botting protects social media users’ interest. Number of views are factors for netizens to choose which live streams to watch; while view-botting might give users a wrong indication on the number of actual people that are watching the live streams.
This regulation also protects the interest of businesses that partner with KOLs. It is of common practice for businesses to pay commissions to KOLs on per-conversion basis. It is discovered that some KOLs purchase for higher number of views, but requested return and refund afterwards to cheat for higher commission. With forbidding fictitious number of purchases, businesses are protected from paying for frauds.
2. Restricted digital advertising content in China
According to the Code of Conduct on Live Streaming Marketing published by China Advertising Association (CAA) in July 2020, contents listed below are not allowed to be included in live streams:
2.1. Holding an objection on the basic principles established by the Constitution, and violating the national laws and regulations;
2.2. Damaging to national sovereignty, unity and territorial integrity;
2.3. Endangering national security, divulging national secrets, and harming the honor and interests of the country;
2.4. Expressing discrimination opinion on ethnicity, race, religion, or sex;
2.5. Spreading rumors that disrupt the social order and social stability;
2.6. Posting materials on obscenity, pornography, gambling, superstition, terrorism, violence, or crime instigation;
2.7. Materials that are insulting, defamatory, threatening, violating third parties' privacy that infringe the legitimate rights and interests of others;
2.8. Materials that endanger social morality or national cultural traditions.
3. China disallows user diversion for private transaction
In the regulation published in June 2020, CAA states that "all sorts of diversion for users’ private transaction is illegal".
Since private traffic and transaction might not be regulated by law, this may protect consumers' rights when there is conflict between the buyer and the seller, preventing the escape from legal responsibility for the sellers when practicing private transaction.
Therefore, when drafting social media messages, avoid wordings that have intention on private sales or bypassing the platform for sales.
Regulations we introduced are just the basics or details that online marketers might overlook when creating advertising campaigns on China market. There are a lot of regulations in China, too much to be included in one single article. Feeling too overwhelmed with the complicated and long list of regulations of online marketing in China? Don’t worry, AsiaPac has a team of China digital advertising expert to guide you through your marketing journey. Click here to learn how our team can help you!
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