Live-streaming e-commerce stars disappear from China’s internet following tax evasion fines

Tracy Qu, South China Morning Post

Posted at Dec 14 2021 01:50 PM

The online presence of two of China’s top e-commerce influencers vanished after they were fined millions of yuan for tax evasion last month, with their social media accounts, Taobao stores and official company website becoming inaccessible over the past several days.

The disappearance of Zhu Chenhui and Lin Shanshan, who built booming live-streaming businesses online with tens of millions of followers, serves as the latest reminder of the risks content producers face in China when amassing huge followings. It is not unusual for those falling afoul of authorities to see social media accounts and online track records erased, without any explanation from the parties involved.

Searches on Taobao – which is operated by Alibaba Group Holding, the owner of the South China Morning Post – for the stores of Zhu, known online as Xueli Cherie, and Lin returned no results on Monday. The website for their company Chenfan Clothing was also down, returning a domain name server error.

Even before the Taobao stores were removed, though, Zhu’s and Lin’s social media accounts were made unsearchable on the microblogging platform Weibo, social e-commerce platform Xiaohongshu, and short video platform Douyin, the Chinese version of TikTok that is also owned by ByteDance. Zhu and Lin had 15 million and 9.6 million followers on Weibo, respectively, before the ban.

Zhu and Lin could not be reached for comment on Monday, and there were no official announcements from the individuals or regulators about the shutdown of their accounts. Xiaohongshu declined to comment. Chenfan,

Taobao, Douyin and Weibo did not immediately respond to requests for comment on Monday.
The disappearance of the influencers could serve as a warning to China’s booming live-streaming and entertainment industry, which has a spotty track record of compliance with the country’s tax laws and regulations.

At the end of November, Zhu and Lin were fined 65.5 million yuan (US$10.2 million) and 27.7 million yuan, respectively, by Hangzhou’s tax authority. The two published apology letters on Weibo shortly after the fines were announced, saying that they “completely accept the decision by tax authority” and would “pause live-streaming” activities.

In August, Chinese actress Zheng Shuang was fined 299 million yuan for tax evasion after her ex-boyfriend Zhang Heng alleged that she had received high pay for a TV show under a fraudulent contract. The once-popular Chinese star has also disappeared from the public eye.

The removal of the Taobao shops came as Chinese e-commerce platforms hosted the Double 12 year-end shopping festival that took place on Sunday. Postal and express delivery companies collected 460 million items during the festival this year, a 20 per cent increase over 2020, according to data released by the State Post Bureau.

However, e-commerce companies have been hit by slower growth this year, which has sapped consumers’ spending power. Alibaba reported its first single-digit growth in gross merchandise value (GMV) this year for the Singles’ Day shopping festival, which took place in November. GMV reached a record 540.3 billion yuan during the 11-day campaign, up 8.45 per cent from last year.

 

 RELATED STORIES: