Three Sheep Group Photo: VCG
The market regulatory authorities in Hefei, East China's Anhui Province, announced on Sunday that Three Sheep Group, the Hefei-based live-streaming e-commerce firm founded by social media influencer Zhang Qingyang, is cleared to resume operations after completing rectification measures linked to a false advertising scandal last September.
This decision followed a joint investigation and a comprehensive assessment conducted by regulators, legal experts, and consumer representatives, according to a notice issued on the Hefei market regulator's WeChat account.
In response to issues identified in product quality control, promotional practices, after-sales services, and internal management, the investigation team has guided the company in formulating 89 specific rectification measures, and urged for the effective implementation of these measures, according to the statement.
The company paid the full penalty of 68.9495 million yuan ($9.5 billion), on October 11, 2024, per the notice. As to the implicated products, including "Hong Kong Meisun mooncakes" and "Australian grain-fed beef rolls" sold on its livestream accounts, the company has compensated consumers a total of 27.78 million yuan and will continue to process eligible refunds.
In September of last year, the company was found by market regulators to have engaged in false commercial advertising during its live-streaming promotion of mooncakes and beef rolls, by misrepresenting product origins and ingredients. Due to the influencer's massive following, the incident drew widespread public and media attention.
Upon the company's request, the investigation team conducted the follow-up evaluation and concluded that the company's rectification efforts met the required standards, making it eligible to resume operations, according to the regulator.
Three Sheep Group also issued a renewed public apology on the same day on its official WeChat account, following the Hefei regulator's notice, stating, "We deeply regret the losses and harm caused to consumers and feel immense remorse."
The company pledged to tighten control over brand partnerships, increase the proportion of self-operated products, strengthen live-streaming content review and ensure the accuracy and consistency of product information and promotional content.
Since September 21, 2024, Douyin, a major Chinese live-streaming platform, suspended broadcasts from the company's affiliated accounts due to the incident and urged the company to actively implement rectifications.
According to third-party data platforms, as of January 13, Three Sheep Group had 800 affiliated accounts under contract, compared to nearly 2,400 in early December 2024, indicating a loss of over 1,600 accounts within a month.
The Hefei regulatory authorities further noted in Sunday's statement that they will enhance supervision, improve enforcement mechanisms, and promote fair competition to better protect consumer rights and maintain a healthy market environment.
Global Times
