China fines influencer agency Three Sheep $9.8 million over ‘made in Hong Kong’ mooncakes.

China slapped Three Sheep Group with a 69 million yuan ($9.8 million) fine after the company founded by one of the country’s top influencers was accused of falsely marketing mainland-made mooncakes as “made in Hong Kong”.

The market regulator in Hefei, capital of eastern Anhui province, on Thursday ordered the influencer agency to suspend its live trading operations, which sell products online through live-streamed sessions.

Three Sheep apologized for “false advertising and misleading consumers” and promised to “make thorough fixes within the company,” according to a statement posted Thursday on the company’s official account on Douyin, TikTok’s Chinese sibling.

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Founded by Zhang Qingyang – better known by his online name Crazy Little Brother Yang, or Crazy Xiaoyangge – Three Sheep has nurtured some of China’s biggest short film stars. In 2022, Zhang became the first influencer in the country to reach 100 million followers on Douyin. He earned about 3.12 billion yuan last year, outperforming his peers, according to a list published by the Guangdong E-commerce Summit Forum.

Zhang Qingyang, known as Crazy Xiaoyangge, presents mooncakes during a live broadcast sale. Photo: Weibo/新浪热点 alt=Zhang Qingyang, known as Crazy Xiaoyangge, presents mooncakes during a live broadcast sale. Photo: Weibo/新浪热点>

The sentence handed down this week included a fine as well as an undisclosed amount of forfeited illegal proceeds, authorities said.

Controversy surrounding Zhang and his agency erupted earlier this month after he began promoting “Hong Kong Meisun Mooncakes,” calling it a “high-end brand” from Hong Kong that dates back more than two decades. . It was later found that the manufacturer of those mooncakes, Guangzhou Meisun Food Company, was not registered in Hong Kong. Nor were his products ever sold in the city.

Mooncakes are traditionally eaten during the Mid-Autumn Festival.

To boost sales, Zhang invited famous Hong Kong actor Eric Tsang Chi-wai to co-host a live session. Tsang was appointed as the representative of Three Sheep’s Hong Kong branch, which opened last month, according to various local media reports citing Zhang’s previous videos.

Tsang did not immediately respond to a request for comment on his current relationship with Three Sheep.

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Mooncakes are usually eaten during the Mid-Autumn Festival. Photo: LightRocket via Getty Images alt=Mooncakes are usually eaten during the Mid-Autumn Festival. Photo: LightRocket via Getty Images>

The Hefei market regulator also disputed claims by Three Sheep insiders that the grain-fed beef they were selling were raw cuts, when they were actually seasoned.

Three Sheep promised to refund customers who bought the mooncakes and beef in question and provide additional compensation three times the prices of the products, according to an automated response generated by the agency’s Douyin account.

This is the latest product quality scandal involving the fast-growing live streaming e-commerce sector. In late 2020, live streamer Xin Youzhi, or Xinba, was fined 900,000 yuan for selling fake bird nests made with sugar and water. Real bird’s nests, an expensive Chinese delicacy, are made from stick saliva.

As a result, Xin was blocked from hosting live streaming sessions on Kuaishou Technology’s short-video platform for two months.

In a separate incident, police in the Hefei High-Tech Industrial Development Zone said a widely circulated audio clip purported to show Three Sheep co-founder Lu Qingwen admitting to engaging in affairs inappropriate with multiple employees, is fake and created with artificial intelligence. .

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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