Special Report

Sympathy Farming

From spun sob stories to bait-and-switch schemes, fraud among livestreamers selling farm produce is damaging China’s poverty alleviation efforts, and legal experts are calling on streaming agencies, online platforms and local governments to weed it out

By Zhang Xinyu Updated Oct.1

Photo by Xinhua

Concerns over false advertising among livestreamers are on the rise – and they stem from produce sellers in China’s countryside. According to a 2022 consumer rights report released in April, false advertising ranked second among the top seven issues raised by surveyed Chinese consumers at 37.82 percent. 　

Livestreaming has been a major component in China’s poverty alleviation efforts, in which agencies help farmers sell their agricultural products to a nationwide market across multiple online platforms. 　

Some feature teary-eyed elderly farmers toiling in their fields, lamenting how their harvests are rotting on the vine because no one is buying. Vying for sympathy, they plead with viewers to help by purchasing their fresh produce – at a low discount. 　

Liangshan Yi Autonomous Prefecture in the south of Sichuan Province, bordering Yunnan Province, is one of the country’s poorest regions. Amid the central government’s call for poverty alleviation, e-commerce streamers descended on Liangshan, seeking opportunities to partner with its fruit and vegetable farmers. 　

However, instead of selling local produce, many source low-quality products from other parts of the country and pass them off as those grown by Liangshan’s impoverished farmers. This hurts the local economy and damages the region’s reputation for its varieties of oranges, green peppers, apples, pomegranates and grapes. 　

Though local governments have taken measures to curb the trend, agencies known as multi-channel networks (MCNs) continue to cash in on Liangshan by pulling at the nation’s heartstrings with sob stories – many of them works of fiction. 　

Su Haopeng, director of the Research Center for Consumer Protection Law, told NewsChina that streamers, MCNs, platforms and local governments should work together to remedy false advertising in e-commerce.

Strange Fruit

In 2018, an article titled “Liangshan farm girl cries over 250,000 kilograms of unsold apples” appeared on popular news platform Toutiao. Photos showed an old man and a girl weeping in a shabby house. The article claimed that bad weather had prevented trucks from delivering their apples to market. 　

The article went viral, and before long businesses promoting Yanyuan apples, a local variety, were seeing 100,000 orders a day. Soon after, Yanyuan County announced the news story was fake, and the photo was copied from the internet. 　

Then in 2021, similar videos showing orchards of Huili variety pomegranates in Liangshan popped up on short video platforms Douyin (China’s TikTok) and Kwai. For example, one streamer surnamed Liu told Jiemian. com in November 2021 about an elderly farmer who pleaded with him to sell his rotting harvest of pomegranates, so he called on his followers to help out. Sensing something else was rotten, netizens and farmers in Liangshan alerted authorities. An investigation revealed that the video had been sourced from the internet and doctored, and there were no unsold piles of pomegranates in Liangshan. 　

Over the past two years, a number of internet celebrities have emerged from Liangshan, many of them touting well-crafted backstories dreamed up by MCNs. The products they hawk are mostly sourced from elsewhere in Sichuan and neighboring Yunnan Province, an investigation conducted by NewsChina revealed. 　

An employee from Liangshan’s market supervision bureau said such practices suppress market prices, damage the interests of local agricultural workers, and destroy Liangshan’s branding. “For example, some livestreamers sell Huili pomegranates at half the normal price, but they aren’t grown in Liangshan and the taste is not comparable, which affects the reputation of Huili pomegranates. This dumping also profoundly affects the local pomegranate businesses,” the source told NewsChina. 　

An industry insider who works at Qianxun Holdings, the MCN company behind online influencer Wei Ya, who has over 17 million followers on Taobao Live and over 9 million on Douyin, told NewsChina: “Top companies in the industry certainly won’t engage in false advertising because they don’t want to ruin their credibility and reputation.” 　

In 2016, Alibaba led the market by offering livestreaming services on their e-commerce platform Taobao, enabling vendors to generate orders during livestreaming sessions. The format was quick to pop up on other apps. Livestreaming services to support farmers took off the same year. 　

Major players such as Wei Ya and cosmetics influencer Li Jiaqi have also promoted agricultural products on their livestreams. 　

As short videos and livestreaming grew in China, platforms such as Douyin and Kwai promoted poverty alleviation projects more aggressively. An e-commerce industry insider who operates over 20 agricultural product promotion bases in Liangshan told NewsChina that Douyin, Kwai and other platforms drove online traffic to agricultural product livestreams as part of the country’s highly touted rural revitalization strategy. 　

According to data from Kwai, influencers hosted around 2,600 livestreams promoting agricultural products from impoverished areas in 2022, making it the third-most popular category of livestream content on the platform. 　

The source from Qianxun Holdings told NewsChina that legitimate produce vendors are certified, meet strict quality standards for size, granularity, sweetness and flavor, and have inventory and order fulfillment services. 　

On the contrary, false advertising in livestreams often occurs during one-off sales. After watching multiple livestreams of several Liangshan influencers, NewsChina found that many did not provide clear details for their products, in particular their origins.

False advertising videos for pomegranates from Huili, Liangshan Yi Autonomous Prefecture. Each streamer’s photo is marked with the Chinese character jia, meaning “fake”

Legal Perspective

Ma Kainong, a lawyer at Zhejiang Zeda Law Firm in Hangzhou, said there are two stages to false advertising in livestreams. “In the early stages, internet celebrities attract followers by creating false narratives. This does not infringe on consumers’ rights and interests, because there was no transaction and the two parties had not entered a contract relationship,” Ma said. “However, in the next stage, if an internet celebrity promotes products and followers buy them, then the two parties have entered a sales contract. The followers then become consumers. When the promoted products are falsely advertised, it does infringe on the rights and interests of consumers,” Ma said. 　

Professor Su Haopeng pointed out that China’s consumer rights law requires that vendors provide truthful and accurate information about their commodities or services, including quality, performance and use. 　

Su added that livestreamers who pitch false narratives about a product’s origin are infringing on the law, no matter the quality of the product. 　

“Just because a product is real doesn’t necessarily mean the promotion is truthful. False advertising damages the rights and interests of consumers,” Su said. 　

Ma told NewsChina that false narratives spun by influencers prevent consumers from making informed choices. They are instead manipulated into making charitable ones. 　

Authorities are still working to regulate the industry, with the E-commerce Law of 2018 and the Online Live Broadcast Marketing Management Measures of 2021, which is still being piloted. In addition, the Consumer Rights and Interests Protection Law, Advertising Law and Anti-Unfair Competition Law provide legal recourse for consumers. 　

In March 2022, the Supreme People’s Court issued 20 articles on regulating e-commerce activities, seven of which involved livestreaming. Su believes that as legal precedent for regulating livestreaming e-commerce increases, more articles will be added in the future. 　

The provisions clarify civil liability of livestreaming. Article 11 stipulates that courts will award compensation to consumers for any damages incurred from false advertisements in livestreaming. 　

In June 2021, a Liangshan court ruled against a production team for false advertisements. The team’s head surnamed Zhao received seven days of administrative detention, while another two primary members were fined a mere 500 yuan (US$69). 　

In addition, Ma Kainong said that livestreamers who fabricate stories to boost business are committing criminal fraud. The Criminal Law defines fraud as the act of acquiring public or private property through fabricated facts or concealed truths. 　

However, Ma Kainong said that prosecuting these cases is challenging, because physical products have been exchanged and proving their true origins can be difficult.

Case and Point

Since 2021, Liangshan Prefecture has tried to address false advertising of its agricultural products. According to the Liangshan Prefecture Market Supervision Bureau, several departments will launch targeted programs this year. 　

Liu Junhai, a law professor at the Renmin University of China in Beijing, told NewsChina that the paltry fines in place compared to the millions in profits earned make regulation difficult. 　

Supervision is also flawed in Liangshan, experts said. Personnel and funding are limited, and many influencers or businesses suspected of false advertising do not operate locally. “The actual place of operation has jurisdiction over the issue,” the head of the internet supervision department of the Liangshan Prefecture Market Supervision Bureau told NewsChina. 　

The sheer number of operators and transactions on e-commerce platforms, and the brief instances of false claims on hours-long livestreams, make it difficult for authorities to collect evidence and build a case. 　

In Su’s opinion, livestreamers should be held responsible first and foremost, and MCN agencies must conduct mandatory legal training for their influencers. 　

Su said that MCNs should also be subject to stricter regulations. “Platforms should not only regulate the behavior of the influencers themselves, but also regulate the MCN agency behind them according to the provisions of their user agreement,” Su said. 　

“The platform must ensure the interests and rights of the majority of consumers, since they created the platform, cultivated the influencers, set the transaction rules and benefit from collected data,” Liu Junhai said. 　

Platforms are obligated to monitor false advertising, and should cooperate with regulatory authorities to strengthen supervision, Liu added. 　

“If livestreamers infringe on regulations, authorities should focus on prosecuting the top earning ones,” said Su Haopeng, adding that authorities should also punish their contracted MCNs. “Only tough punishment will reverse the chaotic situation as soon as possible,” Su said.

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Sympathy Farming