Douyin’s (Chinese version of TikTok) top live streamer “Fengkuangxiaoyangge” (Crazy Little Brother Yang) has once again encountered a setback.
On September 17th, the Hefei High-tech Zone Market Supervision Administration issued a situation report regarding suspected “consumer misleading” behavior by Hefei Sanzhiyang Network Technology Co., Ltd. (referred to as “Sanzhiyang Network”), which is now under investigation and will be dealt with according to the law and regulations based on the investigation results. On the same evening, all direct and talent accounts under Sanzhiyang Network were suspended from broadcasting.
It is worth mentioning that since the beginning of September, in just 17 days, Xiaoyangge’s personal Douyin account “Crazy Little Brother Yang” has lost 2.069 million followers, averaging a loss of 122,000 followers per day. CHAILEEDO noted that possibly influenced by a series of events, sales of the beauty brands JOYRUQO and Lise, deeply associated with Sanzhiyang Network, have also declined. In the past half month, JOYRUQO’s sales have almost halved compared to the same period in July.
“Crazy Little Brother Yang” has been losing an average of 6,185 followers per day.
Since September, the top Douyin live streamer “Crazy Little Brother Yang” has been making waves across the internet due to issues such as after-sales service and scandalous news. Just before the Mid-Autumn Festival, “Crazy Little Brother Yang” was once again in the spotlight for promoting and selling “high-end mooncakes from Hong Kong,” which were later revealed to be manufactured in Guangdong and not sold in Hong Kong. This led to another round of criticism directed at “Crazy Little Brother Yang.”
Regarding the issue of “false advertising,” on September 17th, the Hefei High-tech Zone Market Supervision Administration issued a situation report via the “Hefei High-tech Release” WeChat official account, initiating an investigation into Sanzhiyang Network for suspected consumer misleading behavior during live broadcasts. Prior to this, both Sanzhiyang Network and Xiaoyangge had faced criticism from netizens multiple times for the quality of products promoted, and even engaged in public disputes with top Kuaishou live streamer Simba over product compensation issues.
After being exposed by the Hefei High-tech Zone Market Supervision Administration, all direct and talent accounts under Sanzhiyang Network ceased broadcasting on September 17th, with only a few authorized accounts still active. A recent search by CHAILEEDO revealed that as of 2:00 PM today (September 18th), the main account under Sanzhiyang Network was still offline, with only “Crazy Little Brother Yang (Sanzhiyang)” and “Crazy Little Brother Yang (Sanzhiyang Convenience Store)” broadcasting.
Public records indicate that Sanzhiyang Network was established on March 18, 2021, with Zhang Qingyang (Xiaoyangge) as its legal representative. The company owns multiple trademarks such as Sanzhiyang Network, Xiaoyangzhenxuan, and Daxiaoyangzhenxuan, and serves as the parent company of the MCN agency “Sanzhiyang.” Direct accounts under the company include Sanzhiyang Network, Crazy Little Brother Yang, Qilaoban, and Honglvdengdehuang.
According to media reports, Xiaoyangge joined Douyin in 2018 and registered the account “Crazy Little Brother Yang,” garnering 40 million fans within two years with the “internet addiction” and “desperation” series of short videos. By November 2022, the fan count for “Crazy Little Brother Yang” surpassed 100 million, making him the top influencer in terms of fan numbers on the platform. Currently, “Crazy Little Brother Yang” has 1.17 billion followers.
However, the recent series of public incidents have caused Xiaoyangge to lose a significant number of followers. CHAILEEDO noted that since September, in just 17 days, Xiaoyangge’s personal Douyin account “Crazy Little Brother Yang” has lost 2.069 million followers, averaging a loss of 122,000 followers per day. In contrast, during the first six months of this year, the account only lost a total of 1.126 million followers, averaging 6,185 followers lost per day. It is evident that a series of controversies have led to Xiaoyangge losing nearly six months’ worth of followers.
JOYRUQO’s sales nearly halved
It is worth mentioning that amidst a series of controversies in September, Xiaoyangge only conducted one live broadcast on Douyin on the evening of September 7th. According to previous reports by CHAILEEDO, this 3-hour live stream generated sales exceeding 100 million yuan, with sales volume ranging from 500,000 to 750,000 and over 50 million views. The live stream attracted 250,000 new followers and the sales were 20% higher compared to the live broadcast before the controversies.
On that day, Xiaoyangge featured 4 beauty products in the live stream, three of which were products from Xiaoyangge’s cosmetics brand JOYRUQO. Among them, the “JOYRUQO Amino Acid Facial Cleanser” had the highest sales, ranging between 10,000 to 25,000 units, with sales revenue between 1 million to 2.5 million yuan.
“This wave of controversies may have attracted many bystanders to enter the live stream, bringing in new sales for Xiaoyangge,” Nod, the founder of Jiubian Beauty, told CHAILEEDO. He mentioned that it remains to be seen whether Xiaoyangge, amidst a series of public controversies and a loss of followers, can maintain sales at a stable level. “There is a high probability of a turnaround coming next,” he stated.
It is noteworthy that during the live broadcast on September 7th, Xiaoyangge only featured two beauty brands, namely JOYRUQO and Lise. JOYRUQO, a skincare brand established in 2022, focuses on products like the “Amino Acid Facial Cleanser” and the “Dual Yeast Essence.” According to Feigua data, in the past 30 days, JOYRUQO’s sales in the “Sanzhiyang Network” live stream ranged from 100,000 to 250,000 yuan, showing a fluctuating downward trend.
Taking the highest selling product, “JOYRUQO Amino Acid Facial Cleanser,” as an example, from August 19th to September 2nd, before the controversies, the average sales per session of JOYRUQO in the live stream remained stable at over 5,000 yuan. However, starting from September 3rd, it sharply dropped to 2,500-5,000 yuan, reaching its lowest point on September 14th with sales of only 1,000-2,500 yuan.
Looking at JOYRUQO’s overall sales data on Douyin, from September 1st to 15th, the brand’s sales ranged from 25 to 50 million yuan, a significant drop from over 100 million yuan during the same period last month, and almost halved compared to 50 to 75 million yuan in July.
Similar to JOYRUQO, after its launch in July this year, Lise has frequently appeared in the live streams of various live streamers under Sanzhiyang Network. CHAILEEDO noted that Lise is a makeup brand that has only released one eyebrow pencil SKU so far. According to Feigua data, Lise’s main source of sales comes from “influencer promotions,” with influencers all being under Sanzhiyang Network, including Qilaoban, Zhuo Shilin, Crazy Little Brother Yang, and Crazy Big Brother Yang (Daily).
Feigua data shows that from September 1st to 15th, Lise’s sales on Douyin ranged from 25,000 to 50,000 yuan. Taking one eyebrow pencil as an example, the product achieved its peak sales on September 3rd with 10,000 to 25,000 yuan, but the sales plummeted thereafter, reaching its lowest point on September 8th with only 0 to 250 yuan in sales.
The top live streamers are losing their appeal
According to the “2023 China Live E-commerce Industry Research Report” released by iResearch, the scale of China’s live e-commerce market reached 4.9 trillion yuan in 2023, with a year-on-year growth rate of 35.2%. Although the scale of live e-commerce is already quite large, as indicated by the frequent controversies involving many top live streamers, this industry still has a distance to go for healthy development. Some public comments suggest that changes in fan base size may best reflect the public’s changing attitudes towards these companies. As the saying goes, the larger the traffic, the greater the backlash. Disregarding this principle will inevitably lead to setbacks sooner or later.
“The environment in which the top live streamers operate is quietly undergoing significant changes,” Nod told CHAILEEDO. One of the first changes is the tightening of policies regarding live e-commerce. In his view, “the continuous improvement of relevant regulations is partly due to the fact that for top live streamers with a massive fan base, any of their words or actions could be magnified and have an impact on public opinion safety. Therefore, national regulations on live streaming sales are also aimed at protecting public opinion safety.”
For example, on July 1st of this year, the “Regulations on the Implementation of the Consumer Rights Protection Law of the People’s Republic of China” officially came into effect, stipulating that live streamers must clearly state “who is selling the product” and “whose product is being sold.” Additionally, in September of this year, the Beijing Municipal Administration for Market Regulation issued the “Beijing Live Streaming Sales Compliance Guidelines,” which specify the compliance requirements for live streaming sales and explicitly state that misleading statements such as “lowest price on the entire web” are not allowed to deceive consumers.
Furthermore, the development strategies of major e-commerce platforms have also changed. In July of this year, according to media reports, Douyin is reducing the proportion of traffic distribution to influencer live streams (referred to as “DaBo”) and redirecting traffic to high-quality short videos and brand store streams. Informed sources have also indicated to the media that Douyin’s reduction in DaBo proportion is related to the platform’s desire to improve the e-commerce structure and continuously increase the proportion of shelf-based e-commerce.
Nod believes that short video platforms are like fish ponds, and their current development has matured to a point where they need a continuous stream of fish to create value, rather than just raising one fish to hundreds of pounds. If there are particularly fat fish in the pond, not only will they take up space for other smaller fish to survive, but they may also resist the platform. Therefore, what platforms are currently doing is distributing bait and fish food evenly among the smaller fish. It is evident that the live streaming sales industry is facing a significant transformation, with its operating environment becoming more standardized and fair. When rampant growth is no longer sustainable, top live streamers may need to consider how to maintain their reputation and professional abilities to stay successful in the long run.
