Controversy arose after influencer Crazy Little Brother Yang falsely claimed the mooncakes he sold were shipped from Hong Kong.
Chinese authorities have imposed a hefty 69 million yuan (US$9.8 million) fine on the influencer agency Three Sheep Group, after the company, founded by one of China’s top influencers, was caught falsely promoting mooncakes made on the mainland as “made in Hong Kong.”
The market regulator in Hefei, Anhui province, announced on Thursday that Three Sheep must halt its live-commerce operations, where they typically sell products via live-streamed sessions. The company has since issued an apology for misleading consumers and pledged to make thorough internal changes, as shared on their official Douyin account (the Chinese version of TikTok).
Three Sheep was established by Zhang Qingyang, famously known online as Crazy Little Brother Yang. He’s one of China’s biggest social media stars, having gained over 100 million followers on Douyin and earning an estimated 3.12 billion yuan last year. However, recent events have put Zhang and his agency under scrutiny. Earlier this month, Zhang promoted “Hong Kong Meisun Mooncakes,” describing them as a high-end brand from Hong Kong with over 20 years of history. But it turned out the mooncakes were made by Guangzhou Meisun Food Company, a brand not registered in Hong Kong and never sold there.
To add credibility, Zhang even hosted a live session with well-known Hong Kong actor Eric Tsang Chi-wai, who was recently named a representative of Three Sheep’s Hong Kong subsidiary. Despite the controversy, Tsang has not commented on his involvement with the company.
The Hefei regulator also raised concerns over claims made by Three Sheep influencers about selling grain-fed beef as raw cuts when they were actually seasoned. In response, Three Sheep has promised refunds and additional compensation of up to three times the product’s value to affected customers.
This incident is part of a broader issue in the rapidly expanding live-streaming e-commerce sector in China. For example, in 2020, another influencer, Xin Youzhi (Xinba), was fined 900,000 yuan for selling fake bird’s nests. As a result, he was banned from live-streaming for two months.
In a related matter, police in Hefei clarified that a widely shared audio clip supposedly featuring Three Sheep co-founder Lu Qingwen admitting to inappropriate relationships with female employees, was fake and generated using artificial intelligence.
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