Silence not golden as internet star stays offline

Finance | AIden He 18 Oct 2021

Since going offline nearly three months ago, Chinese internet star Li Ziqi continues to remain silent as speculation rages over whether the celebrity is still locked in a dispute with Weinian, her agency.

Li, who set a Guinness World Record for the most subscribed Chinese-language YouTube channel, has not posted any videos about her idyllic countryside lifestyle since July 14.

Late last month she briefly returned to the public eye in an interview with state-owned Xinhua News Agency.

The month before, Li revealed on Oasis - a smaller social media platform owned by China's Twitter-like Weibo - she had filed a police complaint on August 30, and in reply to a comment under the post, stated that "Capital indeed has its good tricks."

On Chinese social media the word "capital" is a euphemism for powerful businesses.

The reply was later deleted but it set off speculation whether her silence had anything to do with Weinian, as well as rumors that Li has been poached. Her assistant denied the reports but confirmed that Li was "dealing with issues between the company and a third-party company."

Li, who is a star both at home and abroad and is in favour with the government for promoting traditional Chinese values, is Weinian's most famous influencer.

She has 27 million followers on Weibo and in February this year, set a new Guinness World Record for the "Most Subscribed Chinese YouTube Channel" with over 14 million subscribers.

Li sprung to fame in 2016 for her short videos on traditional Chinese cuisine and countryside life, which offer viewers an escape into virtual tranquillity, from the hustle and bustle of city life.

Weinian's founder Liu Tongming contacted her the same year and started to promote her on Weibo, on a contract basis.

Weinian and Li set up a cultural communications firm in Sichuan in 2017 to further their collaboration, with Weinian taking a 51 percent stake and Li owning 49 percent.

In the Xinhua interview, Li revealed she is still the main editor of her videos while the promotion costs are shared with the agency. This is a common business model in the online celebrity economy in which profits are shared on a percentage basis.

As Li's Weibo followers reached 10 million, Weinian launched a flagship store on e-commerce platform Tmall under her name in 2018, to sell traditional Chinese food such as instant snail rice noodles, lotus root powder and rice cakes.

Weinian even set up a food factory to produce snail rice noodles last year due to its growing popularity.

Annual sales of Li's brand rose 300 percent to 1.6 billion yuan (HK$1.93 billion) in 2020 compared to 2019 with snail rice noodles accounting for 500 million yuan of the total.

Her success led to several rounds of investment in Weinian. Last year ByteDance took a 1.48 percent stake in the agency as a strategic shareholder and Weinian was said to be valued at 5 billion yuan after the investment.

Weinian's founders have benefited the most from the funding, with Liu's 20 percent stake now worth about one billion yuan. But Li gets nothing as she does not hold a stake in Weinan, according to Chen Xin, a finance professor at The Shanghai Advanced Institute of Finance.

Hong Tao, a professor from the Institute of Modern Economics and Management at Zhejiang Yuexiu University of Foreign Languages, says the online celebrity economy needs to be better regulated. He says that many vloggers and influencers don't think about protecting intangible assets such as patents and copyrights when they start out, so it's not surprising when internet stars and their agents run into business disputes.

Tao believes authorities should improve laws and regulations governing the sector and perhaps even offer to mediate over disputes if necessary, to help the booming online celebrity economy develop in a "healthy and sustainable manner."

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