(Bloomberg) — China’s biggest livestreaming and e-commerce platforms saw shares drop after the country slapped an unprecedented tax evasion fine on a top influencer, intensifying its crackdown on celebrities responsible for shifting millions in merchandise on the Chinese Internet.
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Kuaishou Technology fell as much as 3.9%, Alibaba Group Holding Ltd. as much as 2.2% and Bilibili Inc. 8.8% Tuesday morning in Hong Kong. Stocks had plunged in Monday trading in New York, where Alibaba fell 5.8%, Bilibili dived 11.6% and Joyy Inc. slid 4.7%.
Huang Wei — a famous livestreamer also known as Viya — was ordered to pay 1.34 billion yuan ($210 million) in back taxes, late fees and fines, the State Taxation Administration said Monday. By Tuesday morning, her accounts had disappeared across platforms from Weibo to Alibaba’s Taobao.
“Viya’s fine for evading tax is a wake-up call. No matter how famous or popular you are, you can hardly evade punishment after tax evasion,” the official People’s Daily newspaper said in a commentary. “As a top livestreamer, she should have taken the lead in abiding by the law. To enjoy the systematic dividends brought about by the new business format, you should demonstrate a matching legal literacy.”
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The episode is the latest step in a growing crackdown on online influencers who have seen their popularity explode in recent years, and may spook not just markets but the merchants and brands who rely on China’s homegrown livestreaming format to drive sales.
It signals that Beijing is turning its attention to the online streaming commerce arena, which has thrived with little regulation in recent years. President Xi Jinping has promised to clamp down on illegal sources of income as part of his “common prosperity” drive to close the wealth gap.
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Viya’s fine shows that China is only half done in terms of its regulatory crackdown, said Justin Tang, head of Asian research at United First Partners.
There may continue to be more fines…
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