Identify the effect of government regulations on the live streaming e-commerce

Abstract

PurposeOn December 20, 2021, Viya, a social media influencer (SMI) with the largest number of followers in China, was exposed for having evaded RMB 643 million in taxes during 2019 and 2020. Consequently, she was fined a total of RMB 1.341 billion by the tax authorities. While the strict government regulations demonstrated in the Viya event may build confidence in the consumers for future purchases, the exposure of issues and problems through implementation of the stronger government regulations may warn consumers off. Thus, the main objective of this paper is to examine the effect of government regulations on consumers' usage intentions of live streaming e-commerce by taking the Viya event as an example.Design/methodology/approachThe authors consider both the positive effect of consumers' perceived benefits of the government regulations and the negative effect of their perceived risks of the Viya event on the usage intentions of live streaming e-commerce. After collecting 314 subjects with diverse gender, ages, education levels and income profiles, the data are processed by partial least squares-based structural equation modeling (PLS-SEM) and SmartPLS software.FindingsThe results demonstrate that strict government regulations can build trust in consumers of live streaming e-commerce by increasing the perceived benefits of restricting the behavior of SMIs. Among the potential perceived risks (social risk, safety risk and psychological risk), the safety risk is supported to have a negative effect on consumers' trust in live streaming e-commerce platforms. Besides, the authors have also identified different types of usage intentions in live streaming e-commerce, i.e. watching intention and purchase intention, and have empirical support for the positive relationships between the consumers' trust in live streaming e-commerce platforms and different usage intentions.Originality/valueThe authors' findings contribute to the application of commitment-trust theory, institutional theory and organizational control theory in the context of the live streaming e-commerce industry. Particularly, the authors use the Viya event as an example to quantitatively examine the effects of strict government regulations, which enriches the existing literature on this topic.