(Yicai) Aug. 21 -- The government of Shanghai has approved a new plan to support the development of the livestream economy in the city.

The plan, approved on Aug. 19, will promote the livestream economy through 2026, the Shanghai government noted. In addition to sales on e-commerce platforms, livestreaming attracts attention for its driving force in boosting catering, culture, tourism, sport, and other consumption, it added.

Shanghai homes over 25,000 livestreaming companies, according to corporate information platform Tianyancha. Nearly 7,000 were set up in the first seven months of this year, up 15 percent from a year earlier, with 44 percent having registered capital below CNY1 million (USD140,200).

Shanghai has a complete infrastructure and is a global metropolis, so its livestreaming targets domestic and foreign consumers, Pan Helin, a member of the expert committee for information and communication economy under the Ministry of Industry and Information Technology, told Yicai.

The city also sits in the Yangtze River Delta region, home to the traditional manufacturing industry, so local livestream sales have easier access to cost-effective products thanks to the powerful supply chain in the area, Pan pointed out.

Online consumption in Shanghai rose 8.5 percent to CNY1.59 trillion (USD222.9 billion) last year from the prior one, a report released by Fudan University's Consumer Market Big Data Laboratory showed. Livestream retail sales jumped 21 percent to CNY437.1 billion (USD61.3 billion), outperforming online retail sales, with the city having more than 52,300 active e-commerce livestream rooms as of the end of last year.

Shanghai has two of the top 10 multi-channel network agencies in China this year, second only behind Hangzhou, according to statistics from Forward Economist. However, it has no major livestream anchors besides the country's top makeup and beauty host Li Jiaqi.

Video streaming platforms Bilibili and Xiaohongshu, also known as Little Red Book, are based in Shanghai, with the latter betting on e-commerce in recent years and helping develop several well-known influencers.

Higher labor costs may become a challenge for the development of the livestream economy in Shanghai, Pan noted, adding that it will take time to improve the relevant regulatory system.

Editor: Martin Kadiev