China Consumer

Fake it till you make it

War of words between livestreamers over Bird’s nest soup


Bird’s nest soup: controversy online over its sales on livestreams

Back in 2020 short-video platform Kuaishou’s biggest livestreaming host Xinba was found to have sold counterfeit bird’s nest soup on his streaming sessions. At first, Xinba, whose real name is Xin Youzhi, denied the product was fake. The influencer used a skimmer to extract gelatinous gloop from the drink, which he offered as proof it was ‘real’ bird nests. He also shared quality inspection certificates for the soup with his followers.

But it was later revealed through laboratory analysis that the Mingzhi Bird’s Nest sold on the livestream did not contain any of the proteins or amino acids that you would expect. Instead, the ingredients were carbohydrates and sugars, prompting viewers to mock that Xinba was really selling “syrup”.

After the controversy Xinba offered to pay back three times the price of the sold items, eventually forking out Rmb62 million to compensate consumers. As punishment he was also banned from livestreaming for 60 days on Kuaishou, with his popularity also taking a big hit. He later parted ways with Kuaishou, moving to rival platform Douyin. But his reach has dwindled to about 10 million followers, compared with 70 million on Kuaishou in his heyday.

Xinba is still sore about the whole episode, it seems. Last week he posted a lengthy rebuke on Douyin alleging that other livestreamers – including fitness influencer Liu Genghong and his wife – had been selling the same Mingzhi Bird’s Nest but that he was the only person to be punished for it. It was clearly a case of “double standards,” he fumed.

After the rant, his account was shut down for 24 hours, with Douyin giving the reason that he had “damaged the image of the platform”.

Liu Genghong became the leading influencer in the online fitness industry in China (see WiC582) when much of the country was in lockdown and he has dabbled in e-commerce livestreaming on Taobao, although not with great success. After Xinba’s accusations were made public, Liu published a statement of his own saying that he had looked up the company he collaborated with at the time for clarity on whether the bird’s nests were indeed counterfeits. He also apologised for not taking more care over product selection back.

After his apology, the row generated 200 million views on Sina Weibo. Liu’s fans voiced their support enthusiastically for the fitness influencer: “That’s the coach we know. So responsible, always being accountable!”

“We’ll always trust you, coach Liu. Don’t let this incident affect you. Always be yourself,” another commented, adding three heart emojis to the message.

Others described Xinba’s rebuke as a sign of sour grapes at Liu’s newfound success. “So just because you were rained on, now you need to rip apart everyone else’s umbrella?” one fan queried.

Of course, the more cynical view would be that clashes like these are a great way for the combatants to get attention. Growth in livestreaming sales has slowed in China – much of which has to do with the disappearances of the country’s top livestreamers Viya and Li Jiaqi. But it is still a major contributor to the country’s e-commerce sector. Take Oriental Selection, the livestreaming channel founded by online education brand New Oriental. Its livestreaming channel, which uses English lessons to sell products, has been on a tear since its launch in June. It claims to have generated sales of Rmb2 billion in gross merchandise value (GMV) over the last three months.

The livestream, hosted by teacher-turned-livestreamer Dong Yuhui, helped reverse the fortune of New Oriental after the government’s heavy-handed clampdown on private tutoring last summer. According to 36Kr, assuming an average gross profit margin of around 37.8%, Oriental Selection has brought Rmb756 million to New Oriental.

Last week, Oriental Selection announced that it has also launched its own e-commerce app. The mobile app carries groceries like fresh fruits and vegetables, seafood, meat and dairy. It also sells a range of consumer products from other labels.

Industry observers reckon that operating its own app will reduce the company’s reliance on Douyin to reach its customers. “It is obviously not safe to put all your eggs in one basket, so it is understandable to extend your presence across multiple platforms,” says 36Kr. “On the one hand, the app can build loyalty around its own domain and make regular product announcements and offer promotions. On the other hand, it can grow [Oriental Selection’s] popularity beyond livestreaming and widen its revenue streams.”

All in all, it’s a remarkable diversification and something of a lifesaver for Yu Minhong’s erstwhile education company, which had gone into meltdown after the government effectively outlawed its core business.

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.