The penalty follows new 2026 regulations requiring identity verification, risk systems, and host credit grading for platforms.
Chinese regulators have slapped a 26 million yuan (US$3.7 million) fine on a unit of Kuaishou Technology, operator of the country’s No 2 short video platform, over multiple violations and misconduct in its live-streaming e-commerce operations, signalling tighter oversight of this market segment.
Chengdu Kuaigou Technology, a unit of Beijing-based Kuaishou, was found to have committed seven breaches including failure to disclose information in accordance with the law, charging unreasonable fees on merchants and inadequate consumer protection, according to the State Administration for Market Regulation (SAMR) in its WeChat post on January 30.
That ruling formed part of regulators’ efforts to “crack down on chaotic practices”, said Shu Lingmin, deputy head of online transaction supervision at the SAMR, in a press conference on Friday.
The hefty fine was the result of an investigation initiated by the State Administration for Market Regulation in September. The investigation was sparked due to supposed “illegal and irregular activities,” including false marketing and the distribution of counterfeit goods, particularly prevalent in the live-streaming e-commerce industry.
This crackdown is now the new operating environment. Just last week, the SAMR and the Cyberspace Administration jointly issued new Livestreaming E-commerce Supervision and Administration Measures, mandating platform responsibilities like identity verification, risk systems, and a credit grading system for hosts. The Kuaishou fine, announced on the same day the probe was launched, is the first enforcement action under this new regime. It establishes a precedent: growth cannot be pursued at the expense of regulatory standards. For Kuaishou, the immediate cost is a fine and a stock dip. The longer-term cost will be the capital and operational effort required to embed these new compliance demands into its platform.
Structural Shifts: Compliance Costs vs. Growth Trajectory
The regulatory pressure on Kuaishou is not an abstract cost; it is a direct structural shift that is now embedded in the unit economics of China's live-streaming boom. The platform's growth story remains robust, but the new rules are formalizing a compliance burden that was previously a hidden operational overhead. In the first half of 2025, Kuaishou's e-commerce GMV grew to 332.3 billion yuan in Q1 and 358.9 billion yuan in Q2, both up over 15% year-on-year. This expansion demonstrates the sector's enduring power. Yet the very scale of this growth is what has triggered the crackdown, forcing a recalibration of how that growth is achieved.
In response to the fine and allegations, Kuaigou released a statement indicating its acceptance of and compliance with the regulator’s decision and penalty.
“We sincerely accept and will resolutely obey the regulator’s decision and penalty,”
the company stated,
The company further pledged to improve its operations in accordance with the law and enhance its compliance level. It also committed to working in collaboration with the businesses on its platform to provide improved services to consumers.
Sources: SCMP, Retail News Asia, AInvest
