Livestreaming sessions by Chinese livestreamers Li Jiaqi and Viya, whose real name is Huang Wei, are seen on Alibaba's e-commerce app Taobao displayed on mobile phones in this illustration picture taken Dec 14, 2021.The scale of China’s lucrative live-streaming business model – revealed by the 1.34 billion yuan tax evasion fine for top influencer Huang Wei, known as Viya – has taken ordinary Chinese by surprise.
When the Zhejiang tax authorities announced Huang’s whopping fine for evading tax payments of roughly 700 million yuan between 2019 and 2020, she was found to hold stakes in at least 16 companies, with a major shareholding in eight, including trade and e-commerce consulting firms. The business model is simple. Influencers, or their multichannel network companies, charge a “pit fee” of between 100,000 yuan and 500,000 yuan for a live-stream session. On top of that, they can take 20 to 40 per cent in sales commissions.
In November, L’Oreal offered vouchers and an apology after customer complaints about a pricing issue prompted Huang and Li to threaten to suspend their collaboration with the French cosmetics giant. According to consulting firm McKinsey, live commerce can help brands, retailers, and marketplaces primarily in two areas – accelerating conversion and improving a brand’s appeal and differentiation.
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