Can L’Oréal hold the Chinese market after boycotts from China’s top two live streamers?

L’Oréal, the global personal care label, has issued a statement on 18 November apologising for “complicated promotions” during the just concluded Double 11 shopping fest. The apology arrived after two of China’s live stream stars Li Jiaqi and Viya had announced their suspensions of collaboration with the brand amid fierce consumer scrutiny in China for alleged false advertising during L’Oréal’s Double 11 promotions.

Public outrage broke out after some discovered that they are worse off by paying more for the product they ordered through the presale live stream on 20 October than those who purchased at a later stage on 11 November.

The presale live stream was hosted by Li, who promised, on behalf of the brand, that pre-order through his live streaming session would be at “the lowest price of all”. Naturally, shoppers would expect that they can purchase the same products at a lower cost by pre-ordering.

However, this privilege was spoiled by a new discount coupon that L’Oréal only revealed in the brand’s livestream on 11 November. The coupon allows holders to buy the same product at a much cheaper price than the deal given on the presale, leaving those early birds frustrated and feeling betrayed.

This has had an impact upon the live streamer, whose reputation is a key corner of their success, and now upon L’Oréal who have lost their ties with two notable collaborators. Beyond this, the level of trust directly between consumers and the brand has disintegrated with this last-minute change, costing the company more than livestreaming revenue.

Over the course of one month, nearly 10,000 Chinese consumers have reported L’Oréal to the Black Cat Complaint, an online service for consumers to file complaints. As the dispute unfolds, the brand has drawn harsher criticism after its refusal to compensate price differentials, with customer service replies indicating “the lowest price promised by Li on the presale does not count” and the live streamer is “just working for them”, as exposed by Black Cat Complaint.

The brand also insists that “the final price is subject to change in different promotions”. These responses have unsurprisingly fuelled the public anger due to its ignorance, pushing any negative values towards L’Oréal even further, compiling the poor position they find themselves in.

As complaints amount, Li Jiaqi and Viya, announced on 17 November to cease their collaboration with the brand and urge the brand to seek solutions for customers who made purchases during the presale.

The statements also acknowledged that the two influencers “would not consider engaging with the brand until the dispute has been properly resolved”. Considering the online influence and commercial value of the two KOLs, who reportedly have generated almost 20 billion RMB ($2.94 billion) in just one night on this year’s Double 11 presale, the suspension will take its toll on L’Oréal’s future engagement with Chinese consumers if left unresolved.

With the Double 11 Shopping Festival scaling up each year, more international brands have joined the annual shopping extravaganza. However, these opportunities come with challenges, as foreign brands would not only abide by stricter governmental rules in China, but they are also subject to closer public scrutiny from both online influencers and individual levels.

Due to the strategic role these influencers play in connecting international brands to Chinese consumers, brands would also benefit from maintaining a good relationship with KOLs. This is clearly where L’Oréal failed this year, losing their KOL relationships as well as trust in consumers in what has become the largest shopping festival worldwide. This loss of value in the eyes of customers has the potential ramifications to impact L’Oreal’s Chinese business in a wider sense, with their response to the issue being pivotal in how they will fare long term.

In the meantime, it is always a rule of thumb to deliver a consistent message of brands’ offers, and comprehensive customer service throughout the event might be a favourable approach for foreign players to not only stand out in the race but to defend their global labels.

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