Recently, the official website of the Shanghai Higher People’s Court announced a criminal verdict: While working as an investment specialist for Meizhi (namely Meimei ONE, Li Jiaqi’s company), a post-90s generation took advantage of his position to negotiate between a company in Guangzhou and Meizhi. In his business dealings, he provided assistance with product selection and delivery, live broadcast scheduling, etc., and received benefits from him many times, totaling 1.09 million yuan. After the news was exposed, topics such as “Li Jiaqi Company’s investment specialist received over one million in favors” and “Li Jiaqi Company was exposed to corruption in the product selection process” quickly became hot searches, triggering widespread attention and controversy. Many netizens left messages asking: An ordinary investment specialist of a live broadcast company received a million yuan in benefits from one company alone. How did he do it?
Is there really a rumored “green channel” in the investment promotion and product selection process of the live streaming industry? How outrageous is the “middlemen making the difference” in the live broadcast industry? Top anchors repeatedly say “bring down the price” and “the lowest price on the entire network”. Do consumers really enjoy the benefits? The reporter sorted it out based on public reports.
How do investment specialists collect millions in benefits?
The Pudong New District Court of Shanghai found that: From July 2020 to September 2022, while serving as the investment promotion specialist of Meishi Company, Zhou took advantage of his position in business cooperation negotiation, product selection, contract signing, and scheduling communication. Knowing the proportion of service fees charged by Meishi Company to Aesthetics (Tianjin) Technology Co., Ltd. (hereinafter referred to as Aesthetics Company), and on the pretext that Aesthetics Company’s products were not selected, he and Deng Moumou set up Shanghai Qiongxing Culture Media Studio In the middle stage, he provided agency services to aesthetics companies, misappropriating a total of 550,000 yuan in company fees.
From August 2020 to June 2022, Zhou provided help with product selection and live broadcast scheduling for the business dealings between XX Company and Meishi Company, and received benefits from relevant personnel of XX Company on multiple occasions, totaling 109 Ten thousand yuan. The court held that the defendant Zhou was guilty of bribery by non-state staff and job embezzlement, and decided to execute a three-year prison sentence, suspended for four years, and fined RMB 250,000.
On November 4, ONE Company issued a statement stating that it had “zero tolerance” for corruption in business activities. The company immediately terminated the labor contract after the employee was taken compulsory measures. It can be seen from the court judgment that the main responsibilities of the live broadcast company’s investment specialist include: business cooperation negotiations, product selection and delivery, contract signing, scheduling communication, etc.
Is there a “green channel” for investment promotion and product selection in the live streaming industry?
After Li Jiaqi’s company’s investment specialist revealed the details of corruption in the product selection process, many netizens questioned whether live streaming companies have long-term “green channels” (meaning taking back doors and taking shortcuts) in investment promotion, product selection, scheduling and other aspects. , and accordingly believe that the live broadcast industry is chaotic and provides a breeding ground for corruption and abuse of power for criminals.
The reporter noticed that there are gray spaces such as “green channels” in the investment and product selection process of the live broadcast industry, which have long been reported in the media. In 2021, CCTV reported that irrational competition starts from the product selection process. “Product selection” is originally the anchor and team selecting high-quality products to recommend to consumers. But nowadays, there is a lot of chaos in product selection in the live broadcast industry. The so-called “product selection” of many anchor teams is not “selection of quality”, but “selection of financial sponsors.” Yang Hua, the person in charge of a domestic product company, said: “From the perspective of market competition, products with good quality and good reputation have a better chance of winning, but that is not the case now. The battle is about who spends more money, because the so-called KOL (Key Opinion Leader) ) has the ability to gather traffic. He will amplify this ability and convert it into value. Whoever gives more money and gives more benefits will be broadcasted for him. Product selection does not depend on national standards or company qualifications. “
The person in charge of a domestic product company even broke the news that in the product selection process, some product selectors were accepting money as “tribute” to the company to “go through the back door”. The person in charge of a domestic product company said: “It’s hard for me to identify the anchor, especially some of the more popular Internet celebrities, which have made the industry a mess. Sometimes the people below him choose candidates because, to put it bluntly, they want some small benefits. We I don’t want to pay this money because I don’t know how the broadcast will be when the time comes, and it’s not legal to pay this fee.”
What are the gray areas in the live broadcast industry?
Public reports show that in addition to the “green channel” in investment promotion and product selection, the live broadcast industry, especially the field of leading anchors, still has many unclear so-called hidden rules and “gray areas.”
The first is to force “choose one from two”, which is accused of value monopoly. At the beginning of Double 11 in 2023, Li Jiaqi, a top live broadcaster, was involved in the center of the storm. On October 24, a JD.com salesperson publicly announced in WeChat Moments that Li Jiaqi was suspected of a “choose one” monopoly – saying that JD.com had received a letter from Hai’s lawyers complaining that the price of a certain Hai’s oven on JD.com was lower than that of Li Jiaqi. The live broadcast price violated the “reserve price agreement” signed with Li Jiaqi and faced huge liquidated damages. On the same night, in the live broadcast room of the head anchor “Crazy Little Yang Brother”, two anchors also attacked Li Jiaqi, saying that because Li Jiaqi held merchants hostage, many big names in Xiao Yang’s live broadcast room were forced to be removed from the shelves.
The second is to falsify the number of traffic fans. In August this year, Xinxin (pseudonym), a post-90s girl, quit her job to focus on live broadcasting. On the evening of August 12, someone sent her a private message saying that they have a professional team that can specifically increase the traffic of the two major short video platforms. Xinxin paid 10 yuan, of which 5 yuan bought 10,000 views and the other 5 yuan bought 100 likes. In less than 3 minutes, her video had more than 10,000 views and more than 100 likes. The reporter contacted the man and was sent a price list: for 60 people in the live broadcast room, the single-session price is 3 yuan and the one-day price is 5 yuan; for 200 people, the single-session price is 18 yuan and the package price is 28 yuan. In addition, there are “snacks” in the live broadcast room, a display of the popularity of yellow car sales, customized mutual aid, fan increase business, and short video likes, collections, comments, playback and other services. It is particularly difficult for new anchors to increase their followers, but through this man’s traffic, it has become very simple. For example, it costs 100 yuan to gain 1,000 followers, 470 yuan to gain 5,000 followers, and 900 yuan to gain 10,000 followers. To increase the playback volume of short videos, the price of 10,000 yuan is 5 yuan, the price of 50,000 yuan is 18 yuan, the price of 500,000 yuan is 130 yuan, and the price of 1 million yuan is 249 yuan…
Where do the huge profits in the live streaming industry come from?
Where do the huge profits in the live broadcast industry come from? To this question, industry insiders have long given the answer: sky-high sales + sky-high commissions + hefty pit fees. According to CCTV reports, there are currently two types of charging models for (anchors) live broadcasts: one is pit fee + commission (commission); the other is pure commission. The pit fee, that is, the fee that anchors need to pay for bringing goods, ranges from tens of thousands to hundreds of thousands of yuan, and there are even so-called “package prices” reaching millions of yuan; the commission ratio ranges from 20% to 50 % varies, and even more, it is as high as an astonishing 70%.
On October 20, 2021, the first night of Double 11, Taobao live broadcast battle report stated that Li Jiaqi sold more than 10.6 billion. On that day, among the 439 products listed in Li Jiaqi’s live broadcast room, 291 were in the skin care and beauty categories, with sales reaching 8.268 billion yuan. Generally speaking, the commission for food in the live broadcast room is 10% to 15%, the commission for household appliances and digital products is about 20%, and the commission for beauty products can reach 35%. Even based on the lower commission of 15%, Li Jiaqi’s commission income for the night will reach 1.597 billion.
In addition to commissions, there are also pit fees. Li Jiaqi and Wei Ya’s daily pit fees are 50,000 to 80,000 yuan. During June 18 and Double 11, anchor fees will generally rise. If Li Jiaqi’s pit fees are calculated again, the pit fees for the 439 items on the first day will be at least more than 26 million. In fact, many companies have complained a lot about the additional “pit fee” model. Some companies broke the news that anchor Zhu Chenhui (Sydney), who was involved in a tax evasion scandal at the end of 2021, only brought more than 200,000 yuan in sales to merchants after charging a “pit fee” of 1.05 million yuan. Some anchors’ “slot fees” are as high as 60,000 yuan, but the total sales are less than 400 yuan. The “pit fee” has become the “high tuition fee” for companies to spend money to buy lessons.
Has live streaming helped consumers “bring down” prices?
In the live broadcast room, what the anchors who carry goods talk about most are things like “bring down the price” and “the lowest price on the entire network.” So, do consumers really enjoy the benefits?
The 2023 Double 11 online shopping promotion officially started. However, on the day of “spot sales”, AMIRO beauty instrument was exposed as a “yin and yang price”, with a price difference of 1,600 yuan for the same product online and offline. This makes consumers who want to “pick up a wave of wool” furious. Netizens reported that the first-generation AMIRO Collagen Cannon products are estimated to be available for 4,599 yuan in the official store live broadcast rooms of several major e-commerce platforms, as well as in the Douyin live broadcast rooms of several celebrities. In August this year, the product was sold for 2,999 yuan in offline Sam’s Supermarkets.
In fact, it is no longer news that top anchors have lost the “lowest price on the entire network”. Whether it was the previous hot search on Weibo where consumers claimed that “Li Jiaqi’s live broadcast room products are more expensive than the official ones”, or the price dispute between Li Jiaqi, Viya and L’Oreal , have triggered extensive discussions among the outside world. Liu Yuanju, a researcher at the Shanghai Institute of Finance and Law, pointed out that “the lowest price on the entire network” is neither realistic nor completely achievable. “It seems to be protecting consumers, but in fact it is likely to infringe on consumers’ interests.” Liu Yuanju pointed out that generally speaking, “the lowest in the entire network” is the core competitiveness of top anchors, and they often sign such agreements. To implement this type of agreement, the brand must sign price agreements with its many dealers. Therefore, a “minimum price agreement in the entire network” is actually behind countless “price-raising agreements” that “cannot be lower than this price”, which may harm the interests of consumers.