High profile livestreamer Xin Ba has been fined 900,000 yuan ($138,000) for selling counterfeit bird’s-nest soup, in the latest dispute related to false advertising in China’s booming livestreaming industry.
Xin Ba (辛巴), whose real name is Xin Youzhi (辛有志), has 71 million followers on short-video app Kuaishou and has been under investigation for peddling a fake nutritional drink that he claimed contained bird’s nest soup, an extremely valuable Chinese delicacy. The livestream sessions were held on Sep 17 and Oct 25 on the account of Shida Piaoliang (时大漂亮), a livestreamer under Xin’s company.
The product was later proven to contain no said nutritional values or proteins and was nothing but “a mix of syrup and water,” according to a laboratory analysis of the drink.
The company that manufactured the product, Guangzhou Rongyu Trading Co., Ltd, has also been fined 2 million yuan ($306,000) for false advertising, according to a notice issued on Wednesday by the Guangzhou Municipality Administration for Market Regulation on its official WeChat account.
Following the regulator’s announcement, Kuaishou issued a notice on Weibo announcing a 60-day suspension of both Xin Ba and Shida Piaoliang’s accounts.
Retailing at an attractive price of roughly 40 yuan ($6) per unit on e-commerce site Taobao, Xin Ba sold over 15 million yuan ($2.3 million) worth of bird’s nest products during the Oct 25 livestreaming session. In an apology posted on his Weibo account, Xin Ba said he would recall the counterfeit products and compensate buyers three times the amount they paid.
The 30-year-old livestreamer came under public scrutiny last month when consumers who bought the product during his livestream session raised questions about the nutritional value of the drink.
Xin Ba initially denied their claims, shared a quality inspection certificate of the product and threatened legal action against people stating “defamatory” comments.
However, Wang Hai, a vigilante who investigates and exposes counterfeit consumer products, revealed a laboratory report on the bird’s nest product, proving that the drink did not contain any protein or amino acids. Instead, carbohydrates and sugar were found to be the dominant ingredients, which Wang said would cost “no more than 1 yuan ($0.15) to make”.
E-commerce livestreaming has become China’s fastest-growing internet application in the first half of 2020, according to a report released by the China Internet Network Information Center.
With over 400,000 active livestreamers in the industry, China saw over 10 million livestreaming marketing activities in the first half of this year, attracting over 50 billion views, said the report.
However, the rising industry has been riddled with misleading advertising practices, substandard products sales and sales numbers fabrication, prompting government agencies to issue regulations to curb illegal activities and violations.
Just last week, tech founder and livestreamer Luo Yonghao apologized for selling wool cardigans branded as Pierre Cardin which were later found to be fake.
Last month, the Cyberspace Administration of China (CAC) published a set of draft regulations that would require livestreamers to carry out real-name identification on the internet platforms they use. The platforms will in turn have to submit regular reports to local authorities.
Operators and marketing personnel of livestreaming platforms are also banned from behavior such as promoting pyramid schemes, bad social habits or falsifying livestreaming e-commerce data such as their number of followers, views and likes.