Online shopping

China’s biggest online shopping celebrity suspended after tax fine

China’s biggest online shopping celebrity has disappeared from Alibaba’s e-commerce platform Taobao after authorities fined her for tax evasion, in a blow to the giant’s fight e-commerce to dominate the growing online shopping market.

Huang Wei, known online as ‘Viya’, had her account on Taobao removed after she was fined 1.34 billion Rmb ($210 million) by the city’s tax office on Monday. the city of Hangzhou for underreporting revenue from promoting goods to its 13 million online fans.

With Viya’s suspension, “Taobao has just lost its core competitiveness in live e-commerce,” said Li Chengdong, head of internet think tank Haitun, adding that many shoppers log into the shopping platform. live Taobao just to buy products recommended by the influencer.

Viya wrote in a statement Monday that she felt “deeply remorseful” and would cooperate with all fines and penalties.

The closure of Viya’s account also cuts off an important marketing channel for Western brands such as Tesla and Procter & Gamble, both of which have hired the star to promote their products in the Chinese market.

For Alibaba, the suspension came after revenue growth slowed in its core e-commerce business amid growing competition from domestic players such as Pinduoduo, Douyin and Kuaishou.

Alibaba relies on a handful of high-profile internet celebrities such as Viya and “Lipstick King” Austin Li, who have been trained to internet stardom or wanghong schools and have the support of professional talent agencies.

Viya and Li collectively sold Rmb19 billion in merchandise on this year’s Singles’ Day, China’s equivalent of Black Friday. “Live streaming is the future of e-commerce, and Taobao is in danger of being taken over by Douyin and Kuaishou,” without the appeal of these high-profile celebrities, Li said.

PingAn Securities expects the value of goods sold through live streams to double this year to Rmb2tn, while more traditional online purchases will increase by 15%.

“Viya is very unlikely to return to Taobao after its account is closed,” Li says, pointing out that another top influencer, Zhu Chenhui, known online as Xueli Cherie, has not returned. to live streaming after being hit with a similar fine in November. .

Viya is the most high-profile case of a celebrity being wiped off the internet as authorities seek to clean up misconduct online and uphold President Xi Jinping’s view that cyberspace is a “spiritual garden”.

China’s internet watchdog, the Cyberspace Administration, announced last week that it had removed 20,000 influencer accounts this year for “spreading erroneous content and polluting the internet environment”. Among their listed offenses are disregarding Chinese history, tax evasion and publishing pornographic and inflammatory content.