BEIJING – A year ago, one of China’s most famous internet celebrities sold about US$1 billion (S$1.4 billion) of products – from shampoo to scarves – in a 14-hour livestream as part of Singles’ Day, the country’s annual e-commerce extravaganza.
This year, the 37-year-old super saleswoman known as Viya won’t take part in the world’s biggest shopping event at all after disappearing from the internet since being fined for tax evasion. A slew of other popular livestream stars who have found themselves caught up in President Xi Jinping’s crackdown on celebrity are also likely to be missing this year, dulling the glamour and likely hurting the takings of the marathon event that ends Nov 11.
A slump in consumer confidence from recurring Covid-19 lockdowns and heightened scrutiny on internet firms was already casting a chill over an annual event that’s shattered sales records since its inception in 2009. Alibaba, the tech giant that dominates Singles’ Day, is expected to post flat to meager growth in takings from this year’s event – Bloomberg Intelligence has even projected an unprecedented fall in the value of its transactions.
But it’s the loss of the celebrity sellers, which quickly became integral to how clothing to food was retailed in China, that will be felt the most. Livestream shopping – where people buy products through social media platforms and interact directly with broadcast hosts – had become a part of regular life for millions of consumers. But its growth has collided with a government push to shape Chinese culture and rein in celebrity influence. Scandals like Viya’s are already prompting brands to shift away from big-name stars, bring broadcasting in-house or use digital avatars to sell goods.
Customers are wary too. About three-quarters of consumers say they would watch a livestream or buy items through the sales channel this year, down from 97 per cent a year ago, consulting firm AlixPartners reported from a survey of about 2,000 people in China. Some shoppers said that negative news relating to broadcast hosts had made them less engaged.
“In recent years, livestreaming seems to have created a quick way for brands to get famous and sales boomed,” said Mr Dave Xie, a Shanghai-based principal of consultancy Oliver Wyman. “Amid the recent falls of the superstar livestreamers, brands are now actively speeding up the development of their own livestreaming studios” in order to cut ties with the top influencers, while retailers are also shifting to smaller platforms, he said.
The roughly two-week Singles’ Day bonanza dwarfs similar events around the world. Last year, millions of shoppers bought what Bain & Co estimates was about 952 billion yuan ($184 billion) of goods during the event – more than the US buying spree that spans Thanksgiving through Cyber Monday.
But prominence comes with scrutiny. Mr Xi’s ‘common prosperity’ drive, aimed at reining in excess wealth, and the government’s efforts to curb the private sector’s influence have hit some of the biggest names across media and technology. E-commerce firms were caught up in a regulatory assault on China’s top internet companies that kicked off in late 2020, when authorities halted the planned initial public offering of Ant Group Co – the financial affiliate of Alibaba – after Jack Ma criticised regulators.
Celebrity scandals
Viya, once seen as the future of shopping, has been the highest-profile casualty in the livestream sector. During her career she’d partnered with Kim Kardashian to host a livestream that sold 15,000 of bottles of the US celebrity’s perfume within minutes. And she held a special event in Wuhan to showcase the city’s revitalisation after a tough Covid-19 lockdown, underscoring how influencers can wield their fame to align with the government’s values.
Her empire came crashing down in December though, when Chinese tax authorities ordered her to pay 1.34 billion yuan in back taxes, late fees and fines. She apologised but hasn’t returned online since.
Another top livestream influencer, Li Jiaqi, was caught up in a scandal mid-year when a tank-shaped cake appeared in one of his broadcasts on the eve of the anniversary of the 1989 Tiananmen Square massacre. That saw the man called ‘Lipstick King’ for his ability to sell the cosmetics vanish from the internet for about three months.
Others have also been done for tax evasion, impacting the valuations of companies that have capitalised on their rise. Viya’s tax fine sparked a drop in shares across the sector, including TVZone Media and Shanghai Fengyuzhu Culture and Technology, amid concerns the crackdown could target more influencers.
