It only took 6 hours to wipe out the online history of one of China’s top live streamers, Viya. Following the penalty notice issued by the Hangzhou authority in the afternoon on 20 December, the once Queen of KOL was handed a hefty fine of 1.3 billion RMB ($204 million) for tax evasion. Due to this, the cosmetic-themed live broadcast scheduled for later on the same day soon disappeared on the e-commerce platform Taobao. By the time of 10 PM, all accounts of Viya, from Taobao to social media including Weibo, Douyin, and Xiaohongshu were erased.
The influencer soon apologised, saying that she would “take full responsibility” and will pay the overdue tax together with fines within the required time limit. While these actions might save her from being held criminally liable, chances of the live stream star shining again in front of the public are rare. With the era of Viya coming to an end, brands who have relied on the top KOL have been left in limbo.
Several retailers who have engaged with Viya told Chinese media that they had stockpiled for the coming livestreaming events, given that the “Queen of Goods” had always been making whopping sales numbers. In addition, consumption is expected to increase, as the country runs towards the festive season making such events more lucrative than most times of the year.
Now while all these efforts could be in vain, brands might also end up with nothing to cover the occurred cost. The scandalous episode has also left these retailers in fear of collaborating with live streamers, at least, in the foreseeable future due to similar dangers by engaging with them.
The fall of the top influencer has also sounded the alarm for many others working in the live streaming industry. It is reported that more than thousands of live broadcasters have voluntarily gone to the local tax departments to pay taxes in arrears after conducting self-inspections, showing the combined impacts of the country’s common prosperity policy and tightened Internet regulations on China’s live streaming industry.
The industry has also come under closer scrutiny since livestreaming salespersons like Viya were officially recognised by the authority as a new profession, and therefore, are subject to stricter rules. Due to this occurrence, China’s online platform might have become a tricky battlefield for market players. While it is clear that live streamers are playing an important role in connecting brands to consumers amid China’s e-commerce boom, brands also need to take extra caution when collaborating with these influencers, as there is always a potential risk to the business if cases like these occur.