The Olive Serum Saga
On the evening of July 12, Luo Wangyu, one of Douyin’s top beauty livestreamers, announced he would take a break from livestreaming and might not return. This decision comes amid a significant controversy over a product he promoted, leading him to promise refunds to all purchasers out of his own pocket.
Earlier this year, Luo, who boasts 20 million followers, was promoting Cosmetic Skin Solutions (CSS) Olive Serum. However, trouble started on February 24 when Douyin test and review streamer Dahu released a video testing various skincare products that claimed to contain olive extract. The tests revealed that four of the six products had low quantities of oleuropein and hydroxytyrosol, essential compounds in olive extracts. Surprisingly, the CSS products had none, even after a second independent test.
Luo’s Initial Response
Luo initially defended the product, arguing that olive extract is complex and might not contain these specific compounds. He also provided the names of the suppliers, Essential and Lipotec. But as Dahu presented more evidence, Luo changed his stance and sued CSS. He stated that if the products were substandard, CSS would refund everyone if he won, and he would refund out of pocket if he lost. The lawsuit dragged on, and Luo claimed CSS refused to settle because the serums, worth 150 million RMB (20.66 million USD), had been sold through his channel alone.
The Final Decision
Under immense pressure, Luo decided to quit livestreaming and refund his followers out of pocket. This announcement marks a significant moment in the ongoing challenges faced by top streamers in China. Since last year, many top influencers have been embroiled in controversies over product quality, pricing, and their attitudes.
The Broader Impact on Influencer Livestreaming
The fallout from Luo Wangyu’s situation reflects a broader trend in the influencer livestreaming world. High-profile streamers like Li Jiaqi and Crazy Little Brother Yang have also faced controversies, leading them to diversify and distance themselves from streaming. Platforms are responding by introducing merchant-led livestreams and simple discount strategies.
Some industry experts suggest that the golden age of influencer livestreaming social commerce might be over. However, it’s still unclear if this marks the end or just an evolution into the next phase.
What This Means for Marketers and Businessmen
For marketers and business leaders, this saga underscores the importance of transparency and accountability. Trust is critical in the influencer market, and controversies like this can severely damage a brand’s reputation. Here are a few key takeaways:
- Quality Control: Ensure that products promoted by influencers meet high standards to avoid damaging backlash.
- Transparency: Be open about product ingredients and sourcing to build trust with consumers.
- Risk Management: Have a plan in place to handle potential controversies and protect your brand’s reputation.
Looking Ahead
The influencer livestreaming space in China is at a crossroads. While some believe its peak has passed, others see potential for new growth and innovation. Marketers should stay agile and be ready to adapt to the changing landscape. The focus should remain on building genuine connections with audiences through high-quality products and transparent practices.
Luo Wangyu’s departure is a wake-up call for the industry. It’s a reminder that while the reach of top livestreamers can drive massive sales, the responsibility that comes with it is equally significant. As the industry evolves, those who prioritize trust and quality will likely come out on top.
