First Wechat Business Brand in China Identified as a Pyramid Scheme

The cosmetics brand “TIN’SECRET” run by the Chinese celebrity duo Zhang Ting and her husband Lin Ruiyang owned by Shanghai Da Er Wei, was found to constitute an illegal act of organizing and planning pyramid schemes. The illegal gains were confiscated for $3.03 million and fined $270,000.

On April 9 (Beijing time), the Chinese celebrity duo Zhang Ting and Lin Ruiyang once again faced a critical criticism, because the Chinese media reported in the afternoon of the same day that the couple’s brand “TIN’SECRET” pyramid scheme had been characterized by the relevant Chinese departments and fined about $3.3 million by the Chinese relevant departments.

As soon as the news came out, the topic hashtagged “Zhang Ting’s TIN’SECRET identified as a pyramid scheme” was immediately ranked first on the trending list of The Chinese social platform Weibo. As of 14:35 on April 11 (Beijing time), the topic triggered 580 million views and 35,000 discussions.

The Chinese media said in the report that after investigation, the Hubei Baokang Administration for Market Regulation believes that the bonus system formulated by Shanghai Da Er Wei Trading Co., Ltd. (hereinafter referred to as “Shanghai Da Er Wei”), the operating entity of the “TIN’SECRET. It divides members into two categories: Blue Card and Red Card, of which Blue Card members are general consumers and the bonus system for them is in line with commercial practices and does not violate the law.

However, the bonus system implemented by red card members is to require the existing customers to invite other potential customers to join in and thus form an economical relationship between the two parties. And the online remuneration of the existing customers is based on the sales performance of the potential customers, but this belongs to the relevant provisions of China’s Regulation on the Prohibition of Pyramid Selling, which is a pyramid scheme and constitutes the illegal act of organizing and planning the pyramid scheme, confiscating the illegal income of $3.03 million and fining $270,000 according to the law.

It is worth noting that the Hubei Baokang Administration for Market Regulation determined that “TIN’SECRET” constituted the illegal act of organizing and planning pyramid schemes that happened in September 2021. After that, the Administration for Market Regulation of Yuhua District, Shijiazhuang, Hebei Province, began to intervene in the investigation of “TST Court Secrets” suspected of using the internet to engage in pyramid schemes, and in December 2021, “TST Court Secrets” officially stated: “Shanghai Da Er Wei is a legally operated Chinese company, and since its establishment, it has always followed the guidance of the Chinese government, adhered to legal operations and paid taxes according to law. Thank’s very much to the Administration for Market Regulation of Yuhua District, Shijiazhuang, Hebei Province for guiding our company to check the risks. At present our company’s current operation is normal and we’ll cooperate with the relevant departments.” Zhang Ting and Lin Ruiyang also forwarded the response on Weibo.

It is reported that “TIN’SECRET was once known as “the first Wechat business brand in China”, Lin Zhiling, Tao Hong, Fan Bingbing and many other Chinese stars have supported it. Due to the blessing of the star effect, many consumers were willing to pay for it and the brand has successfully developed many downlines, thus forming a “pyramid scheme model”.

It is understood that Shanghai Da Er Wei is jointly operated by Zhang Ting and Lin Ruiyang, with a registered capital of more than $35 million and the legal representative being Lin Ruiyang. According to the information on the official website of “TIN’SECRET”, Shanghai Da Er Wei is a Chinese social e-commerce enterprise with its own brand founded by Lin Ruiyang and Zhang Ting in 2013 and headquartered in Shanghai, China, which has its own brand of “TIN’SECRET” that focuses on cosmetics and skincare products as well as the TMM brand that focuses on household consumer goods. The brand mainly sells its products through the O2O method of TIN’SECRET’s online APP and its offline physical stores.

Zhang Ting, who has faded out of the Chinese entertainment industry for many years, was once the predecessor of Zhao Wei, Fan Bingbing and many other popular stars in China and her husband Mr Lin was once a well-known actor in Taiwan. Zhang Ting currently has 4.378 million followers on Weibo and 31.657 million followers on the Chinese short video platform TikTok, while her husband has 1.308 million followers on Weibo and 3.3 million on TikTok. The above platform accounts have all been banned except for Mr Lin’s account on TikTok.



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