China Probes Kuaishou’s E-Commerce Subsidiary Over Suspected Law Violations

China's market regulator, the State Administration for Market Regulation (SAMR), has officially opened an investigation into Chengdu Kuaigou Technology Co., a wholly owned e-commerce subsidiary of Kuaishou Technology. The probe targets suspected violations of China's e-commerce laws related to how live-streaming services are used to promote e-commerce. This investigation reflects growing regulatory scrutiny over the fast-expanding live-stream shopping sector, where issues such as false advertising, counterfeit goods, and irregular practices have been persistent despite bans.

Chengdu Kuaigou operates Kuaishou’s shopping platform and Kuaishou Shops, handling sales driven by live-stream hosts and short-video creators. Recent regulatory actions including this probe seek to ensure compliance with e-commerce rules, protect consumers, and uphold the interests of small and medium enterprises. Kuaishou has responded by stating it will actively cooperate with regulators and views the investigation as an opportunity to improve compliance standards.

The probe is part of a broader effort by Chinese authorities to promote healthy development in the platform economy, especially in the live-streaming e-commerce industry which has faced repeated challenges with counterfeit products and deceptive marketing practices. Kuaishou's e-commerce business has seen significant growth, with gross merchandise volume (GMV) reaching approximately 359 billion yuan in Q2 2025, despite these compliance issues. This regulatory action adds to ongoing sector-wide oversight, as authorities aim to reinforce consumer rights and platform accountability.bloomberg+4

Key points of the investigation and context:

• The probe follows a preliminary review by SAMR targeting Chengdu Kuaigou for violations of e-commerce laws and related regulations.

• The live-stream shopping industry is under intensified regulatory focus due to repeated problems with product quality and false marketing.

• Prior to the probe, Kuaishou faced penalties and warnings related to violations of cybersecurity and youth protection laws.

• The investigation is a signal of stricter governance on e-commerce platforms, including algorithm transparency, intellectual property enforcement, and consumer protection.

• Kuaishou’s shares have experienced a modest decline since the announcement of the probe.

• The regulatory crackdown is also impacting other major e-commerce players in China such as Alibaba, JD.com, and Pinduoduo as authorities seek stronger oversight of counterfeit goods.tradingview+3

This case underscores the ongoing challenges in the booming live-stream shopping market and the Chinese government’s commitment to ensuring platforms operate within legal frameworks for long-term industry health and consumermer trust.