China firm pays actor US$400,000 for live-stream, demands refund after dismal product sales

A company in China that paid a celebrity three million yuan (US$400,000) to sell its products has demanded the fee back after the actor only sold 200,000 yuan (US$28,000) worth of goods.

Sichuan New Green Pharmaceutical Technology Development Co Ltd, which is based in the southwestern province of Sichuan sought the live-streaming services of Taiwan actor and singer Ming Dao.

But the firm has demanded a refund because viewers did not buy enough of its shampoo via his live-streaming session on June 14, during the annual 618 shopping festival.

A company spokesperson, surnamed Yang, told Hongxing News on August 4 that the three million yuan was paid to Joy Media, the mainland Douyin influencer agency that Ming belonged to, via an intermediary company, for a special six-hour session.

Famous in the Mandarin-speaking world in 2000s for his many idol dramas, such as The Prince Who Turns into a Frog (2005) and The Magicians of Love (2006), Ming has focused his career on the mainland in recent years.

The 44-year-old celebrity has appeared in several reality shows and is recognised as one of the best-selling live-streamers on Douyin with 8.3 million followers on the platform.

According to China’s short video data analysis platform feigua.cn, Ming sold more than 100 million yuan (US$14 million) worth of products in the first seven months of this year. The company’s sales were at the bottom of his list.

The company said it had produced 50,000 products, priced at about 100 yuan (US$14) each, for Ming’s session.

A total of two million people watched the live-streaming session over the six-hour period, but only 348,000 yuan (US$49,000) worth of products were sold, half of which were returned during the following month.

The company asked Joy Media for a proportional refund, but Yang said the contract did not stipulate a minimum sales figure.

A member of staff from Joy Media said Ming had fulfilled his responsibility, which was to “promote the brand”, and they would never have agreed on a minimum figure as New Green’s shampoo was a new and lesser-known product.

Joy Media said it had allocated 20 members of staff to work on the session and spent 500,000 yuan (US$70,000) to boost traffic.

It also said it had offered solutions to New Green, such as repeatedly showing video clips from the session to attract buyers, and promoting the shampoo in 10 other live-streaming sessions.

China has 1.07 billion internet audio and video users, who spent 1.15 trillion yuan (US$160 billion) last year, according to a report released by the China Netcasting Services Association.

The lucrative market has turned many entertainers and former celebrities into live-streaming influencers.

While many brands believe celebrity endorsements have a positive impact on sales, the actual figures are sometimes disappointing.

Last year, a food company from eastern China’s Anhui province said it had paid 33,000 yuan (US$4,500) to Beijing television actor Du Xudong, who had 5.4 million followers on Douyin, to sell its wood ear mushrooms in his live-streaming session.

Du sold only one pack priced at 65 yuan (US$9) and blocked the company’s account after it tried to ask for a refund.