consumer protection influencer economy Long-term rental

Prominent Tech Sectors Face Scrutiny Receive After Consumer Complaints Amass

Aron Chen

posted on March 19, 2020 1:47 pmEditor : Chen Du

"315 Gala", China Central Television's (CCTV) annual televised show that exposes companies for fraudulent behaviors that violates consumer rights, was postponed this year due to complications of the ongoing Covid-19 pandemic, leaving internet users discussing, and even some joking, that companies scheduled to be publicly shamed may have already gone out of business due to the outbreak before CCTV got a chance to shame them.

Much like the society's many normal functions amid the outbreak, people have been moving their discussions about consumer protection online. More than 12 million consumer posted approximately 35 million complaints to defend their right on Weibo in 2019, according to Black Cat, a consumer complaint resolution platform.

The platform has found that prominent tech sectors, including influencer marketing and internet-based long-term apartment rentals, were among the most complained about industries.

Since the popularization of short video and live streaming apps, people found entertainment and a new way to purchase products through influencers. Austin Li (Li Jiaqi), a top performer in the game who earned the nickname of "Iron Lips" by testing hundreds of lipsticks in a single show, was able to sell as many as 15,000 of them in 5 minutes. 

Countless influencers and wannabes are doing the same thing everyday on Chinese platforms, covering a broad range of products, creating a robust ecosystem of influencers, marketing agencies, suppliers all eager to cater to hundreds of millions of consumers.

However, the lack of effective regulations, as well as excessiveness in the influencer economy in China has put consumer in a vulnerable position. According to Black Cat, Sina Weibo users have published 8,566 posts on the platform, many of which accused influencers of selling counterfeit products or doing misleading advertisement.

A user on popular short video app Kuaishou complained documented how difficult it was to get a refund after she purchased luxury hand bags through a link attached to an influencer's live streaming webpage and found out the bags she purchased were of inferior quality.

"(The influencer) betrayed my trust. I used to watch her shows every day but now I'm no longer a fan because of the misleading advertisement” said the user in a letter to Black Cat. She received her compensation after long negotiation with the merchant who supplied the hand bags to the influencer she used to follow.

As the king of live streaming influencers, even Li was involved in some kind of misleading advertisement in a Taobao live streamed show in October last year. He attempted to demonstrate a nonstick frying pan by cooking an egg with it but the egg stuck and became burnt. Tens of thousands of fans watched the show and left negative comment like "What an awful joke, this is a fake advertisement" while Li was still on the show.

In another instance, customers who received fresh crabs promoted by Li complained about the quality being unmatchable with what he promised to be in his live shows.

Influencers often get in to trouble due to Issues like fraudulent product, misconduct, and misleading advertisement. In some extreme cases, they might also end up in detention.

Back in 2018, an influencer dubbed "Cat Lady" was found to have sold 3,000 pairs of counterfeit sunglasses on Taobao live streams, amounting to illegal income of 1.95 million RMB. The e-commerce platform shut her down and reported her to the police after customers reported that the influencer insulted and blocked those who raised questions. The influencer fled the country but later returned and was detained by police in Shenzhen.

Long-term rental industry also received mounting complaints, according to Black Cat.

One classic example of the many cases in the sector is Danke Apartment, which was accused of raising rent on its tenants during the Covid-19 outbreak while using the crisis as an excuse to delay payments on its own lease.

The business model of Danke is widely known as subleasing or middleman landlord, which is to lease apartment from individual owners on a long-term basis then renovates and furnishes these properties then renting them out to new tenants.  

Malpractices Danke adopted during the Covid-19 outbreak reflects the cash struggles of Danke. The company said in early February that it is updating its policy to allow for a 30-day rent-free period for tenants who are caught up in the outbreak. However, the company is still found to be collecting from tenants and increasing rent charges on quarantined tenants. Meanwhile, it also delayed payments on its own lease. The move triggered a wave of criticism from both Danke's landlords and tenants.

Angered users have set up chat groups to discuss countermeasures. On one forum, a landlord left comments saying he's been to Danke's office and demanded that they pay up. In an interview with PingWest, the landlord said the company is coercing him into accepting missed payments because it is helping the tenants.

In a post on the Black Cat platform, a tenant said she has no home to return to because her landlord was unsatisfied with Danke’s malpractices, and forced her to be removed from her rented apartment.