After his “technical issues” in June 22, Austin Li is once again under the spotlight for on-camera misdeeds—could this be another nail in the coffin for his sputtering reputation?
Li Jiaqi—commonly known as Austin Li—is the main topic of conversation on social media in China once again this week. His social media apology has racked up more than 500MM views in under two days, and the self-styled "Lipstick King’" has been left with egg on his face after making some badly thought-out comments live on air.
But what happened, and what can we learn from it?
During a livestream on Sept 10, a viewer complained that a buy-one-get-two-free deal on Florasis (花西子) eyebrow pencils priced at 79 RMB (around $10.80) was expensive. Li replied citing the difficult market conditions for domestic color cosmetics brands, and queried “Is the product expensive? Sometimes, people need to think about the reasons why they haven’t received a pay raise after so many years. Have they worked hard enough?”
The obligatory self-reflective, groveling apology and promise to “control his emotions” followed. In the comments, netizens have accused Austin of arrogance, of forgetting his roots, and of a lack of sensitivity towards the current economic climate. There’s no good time for this kind of scandal, but losing momentum just over a month before the pre-sales for Double Eleven, Alibaba’s key sales festival, is definitely not ideal. Within 24 hours he had lost more than 600,000 followers on his official Weibo account—a sign of the strength of feeling he’s stimulated in many (one-time) fans. Florasis is also said to be reviewing their relationship with the star.
The area where commenters were more reconciliatory was on Li’s defense of the strength of domestic brands and their perceived value. Since his return from his hiatus in mid-'22, he has increased the time he dedicates to promoting Chinese brands alongside his preferred big-name international brands. That he was "standing up" for a domestic brand may be his saving grace, although other online commenters have highlighted that the price per gram of the product was similar to brands like Bobbi Brown, and considerably higher than competitor Chinese brands like Perfect Diary and international brands including YSL.
More broadly, what does this episode tell us about Chinese consumer confidence as we enter the key selling period of the annual marketing calendar? As has been widely reported, it’s clear that normal Chinese consumers are feeling the squeeze on their pockets—nothing is a better demonstration of that than consumers complaining about high prices in the frenzied discount environment of Austin Li’s livestreaming studio. Saving rates continue to remain high, concerns about the macro situation—from unemployment to the housing market—loom large, and consumers continue to lack the confidence to spend. That coupled with dipping exports has seen Chinese companies focus more intensely on the domestic market, leading to increased competition and even deflationary pressures on consumer prices.
For international brands looking at China, consumers are looking for proof of value—and are still willing to pay for high-quality products and for brands with strong equity in the market. Pressure to increase discounts has been growing throughout 2023, and merchants must tread a careful path between activating consumers and not creating a discount spiral which is hard to break when the sun again shines on Chinese consumers in the near future.
And what does the future hold for Austin? His brand of cheeky boy-next-door relatability has been one of the most powerful influencer brands created globally, and his promise to bring the best value to his fans may trump any offense caused. According to a Chinese proverb, the tallest tree catches the most wind. Austin Li has long been the redwood of e-commerce livestreaming —the question is, are his roots strong enough to withstand the typhoon?
