Chinese Companies Find Celebrities Are Risky Business.



China’s ongoing crackdown against celebrity “idolatry” has significantly impacted advertising practices that include these figures in a recent study.

It was reported that the use of Chinese, referred to as “traffic stars”–music or film stars that generate massive internet traffic in marketing campaigns decreased by 50.9 percent in March this year as compared with the same timeframe in 2023, as per an analysis by the data marketing company Shiqu Insight Engine. The report revealed that the decline was despite a general increase in the number of new product launches and other events.

China has witnessed several scandals involving celebrities in recent times, ranging from accusations of sexual assault and tax fraud. As the scandals grew and the government’s efforts to curb the use of stars in marketing products.

The scandals range from a few to hundreds, and the most well-known are missing Zhao Wei, an actress who is often compared to Angelina Jolie of China. In August of last year, the 46-year-old billionaire vanished, all of her movies and television shows were removed from the internet, and her Twitter-like Weibo account, which 86 million people followed–was shut down. There is no explanation; however, Zhao and her husband have been barred by her account on Shanghai Stock Exchange after their unsuccessful attempt to take over a company. The bourse claimed it was because they “disrupted market order.”

Another starlet, Zheng Shuang, was exiled for Zheng Shuang was blacklisted from the Chinese entertainment industry and then dropped as a Prada spokesperson following news that she was pregnant with two kids in America. The U.S. through surrogacy is a method that is banned in China.

Zheng is also among many celebrities accused of tax evasion, which soared following the time China restricted the amount that stars could receive for blockbuster films.

The scandals reached their peak this summer when Chinese-Canadian music celebrity Kris Wu was arrested on allegations of sexual assault. The incident led to the #MeToo movement in China going to such an extent that authorities started banning the term on social media. Wu was promptly removed by major foreign and domestic brands such as LVMH Moet Hennessy Louis Vuitton (ticker: MC.France).

There was no word from Zhao Zhao. Meanwhile, Zheng acknowledged the mistake. Wu was adamant about the rape allegations before his arrest.

Apart from direct intervention from Beijing, the chilling impact has led companies to reconsider how they interact with celebrities, analysts claimed.

“Many brands are spooked and seeking less risky alternatives to celebrities who can disappear from the limelight overnight, bringing negative associations to the brands they endorse and swallowing large shares of marketing budgets that could have been more effectively spent elsewhere,” Mark Tanner, the managing director of China Skinny, a marketing research company China Skinny, told Barron’s.

China has employed public media and its official channel to create a wave of criticism of “unwholesome” public figures and a rise in general standards that celebrities are judged. Many observers view this as the core element in President Xi Jinping’s “common prosperity” campaign, which aims to narrow the gap in income and clamp down on those who boast of wealth or are extravagant.

There’s more to it than just the crackdowns and brand skepticism. According to Jennifer Ye, China’s consumer market leader for PwC China, there’s a shift in consumer attitudes.

“Brands must present significant value propositions to gain more educated, discerning, and conscientious customers. The modern Chinese consumers are seeking brands they can trust and that align with their values and beliefs,” she stated to Barron.

In addition, sports marketing is experiencing an opportunity to grow after Beijing’s most recent Winter Olympics. The number of campaigns featuring athletes grew sixfold over the last year, as the Shiqu Insight report found.

Anta Sports Products (2020. Hong Kong), Tiffany, and Luckin Coffee (LKNCY) took on freestyle skier Eileen Gu as a brand ambassador before taking home an Olympic gold medal in February. According to the company that sells online claimed, Gu’s sales of her Anta ski suit increased 20 times through JD.com (J.D.). Gu proudly displayed her Tiffany jewelry when she held her gold medal during the ceremony to award her with it, which caused the jewelry to become popular across Chinese Social media. The drinks she was a fan of originated from Luckin Coffee– Starbucks’ (SBUX) biggest rival in China — sold worldwide.

Gu has also joined forces with Victoria’s Secret (VSCO), Estee Lauder (EL), and Visa (V), in addition to other brands.

“Sports stars are obviously hot at present on the back of the Winter Games, but many of the snow stars’ pulling power is likely to be short lived as the champagne effect fades,” Chinese Skinny’s Tanner. “Nevertheless, promoting sports performance and participation is high on Beijing’s agenda, so sports stars are more likely to be supported by policies and lack of enforcements than other celebrity classes.”


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