The situation reflects the fragility of Chinese live-streaming e-commerce programmes centred around popular online influencers, according to marketing professionals. Li’s nickname came after he sold 15 million tubes of lipsticks in just five minutes on Taobao.
“His absence will be disadvantageous to brands that aimed to boost sales during the promotional period [of this year’s 618 shopping festival],” said Miro Li, founder of marketing consultancy Double V.
Taobao did not immediately respond to a request for comment on Tuesday. Like Taobao, the South China Morning Post is owned by Alibaba.
The stakes are high for Taobao to make up for lost sales from this debacle involving Li, as the midyear 618 shopping festival serves as an important barometer to measure consumer spending amid the nation’s faltering economy ahead of Singles’ Day – the world’s biggest annual retail extravaganza.
Compared with other Chinese online shopping platforms, “Li’s disappearance is dealing a heavy blow to Taobao”, said Double V’s Li, who is not related to the popular online influencer. She said Taobao has “failed to support mid-level live-streamers after losing Viya”.
“If Li’s disappearance turns out to be permanent, his fans may move to other [live-streaming e-commerce] platforms,” she said.
Li on Friday issued a short notice on Chinese microblogging service Weibo, saying that a team in the back office was sorting out a technical error. He asked his audience to “wait a moment”, but two hours later he again posted on Weibo to tell them that the show could not proceed owing to a “malfunction in back office equipment”.
But things may not be what they seem. Li was suspended because his show last Friday featured a tank-shaped ice cream, according to a report by The Wall Street Journal. Chinese internet censors could have been triggered because the tank image is associated with the brutal Tiananmen Square crackdown by the Chinese military against a pro-democracy movement on June 4, 1989.
Still, no Chinese regulator or official media has published anything about such a suspension. A search of “tank” on Taobao showed thousands of results, mainly toys.
Li’s marketing agency, MeiOne, declined to comment.
The June 4 crackdown remains politically taboo on the mainland. Bike ride-sharing start-up Bluegogo stepped on that landmine in June 2017 when the firm swapped its bike logo to a tank for a promotion. Bluegogo, which had 20 million registered users at its peak, went bust later the same year, with company founder Li Gang blaming the ill-advised promo for his start-up’s failure.
For the country’s online influencers, many of whom grew their business on the back of Chinese social media platforms and the live-streaming e-commerce boom during the coronavirus pandemic, crossing so-called red lines can immediately wipe out years of hard work in developing their personal brand and audience.
Live-streamer Xinba, for example, came under fire in late 2020 when the market watchdog in Guangzhou, capital of southern Guangdong province, found that he had promoted a bogus bird’s nest – an expensive Chinese delicacy – made of sugar and water. The regulator fined Xinba 900,000 yuan and short-video platform operator Kuaishou Technology blocked him from hosting live-streaming shows for 60 days.
“There has always been a risk when working with key opinion leaders [KOLs] in China,” said Elijah Whaley, co-founder and chief executive of consulting firm Aguaba. “[An influencer’s] campaign can abruptly stop or cause a public-relations nightmare because of personal, professional, legal or governmental issues.”
For Li, he has been the top pick for many brands’ online campaigns. In his cancelled live-streaming show, he was to promote Shiseido-owned Nars Cosmetics, Hilton Hotels and Resorts, and American leather goods maker Coach, according to his published schedule.
Aguaba’s Whaley indicated that young Chinese consumers are attracted to KOLs “for their entertainment value and the variety of deals”. This means “brands don’t have a choice”, he said. “They have to use live-streamers if they want to have that top line, high-impact awareness.”