The encyclopedia · Advertising & PR · Marketing decision · 2024
Three Sheep sold 'Hong Kong mooncakes' that did not exist in Hong Kong — ¥69M fine
Top KOL sold 'Hong Kong Meicheng Mooncakes.' The trademark was 11 months old. Hong Kong had no stores, no factory, no mooncakes.
Three Sheep Network Technology · Guangzhou Meicheng Food · 2024-09
What happened
Before the 2024 Mid-Autumn Festival, Three Sheep Network Technology (三只羊), the MCN behind top livestreamer Crazy Little Brother Yang (疯狂小杨哥), sold 'Hong Kong Meicheng Mooncakes' (香港美诚月饼) across multiple livestream sessions. The brand was presented as a Hong Kong heritage mooncake maker. In reality, the 'Hong Kong Meicheng' trademark had been registered on 22 September 2023 — less than a year before the campaign. The operating company was Guangzhou Meicheng Food Co., which had no stores, no factory and no sales in Hong Kong.
Consumers discovered that the 'Hong Kong mooncakes' could not be bought in Hong Kong. The story went viral. On 18 September 2024, the Huadu District Market Supervision Bureau in Guangzhou issued a public notice confirming the brand had no Hong Kong operations. An investigation found that Three Sheep's livestreams had made false claims about the company's history and scale.
Three Sheep was fined and had illegal gains confiscated totalling ¥68.95 million, and was ordered to suspend operations for rectification. Guangzhou Meicheng Food was separately fined over ¥500,000 for false advertising. The case exposed the 'fake import' (伪进口) model: registering a foreign-sounding trademark, wrapping it in a heritage story, and selling it at a premium through livestream channels.
Why it happened
- The entire value proposition was the 'Hong Kong' story — without it the product was an unremarkable mainland mooncake competing on price in a saturated market
- The KOL's audience trusted the 'Hong Kong brand' framing because the livestream format does not invite verification — viewers buy the story, not the product
- The trademark was registered less than a year before the campaign, but the livestream scripts implied decades of heritage — the gap between claim and reality was the whole business model
- When the fraud was exposed, the damage hit both the brand and the KOL: Three Sheep's ¥69M fine was one of the largest ever imposed on a Chinese livestream company
The lesson
A brand story that cannot survive a five-minute search is a countdown, not a strategy. Livestream audiences buy the narrative — but they also have the internet.
Aftermath
The case became the defining example of the 'fake import' model in Chinese e-commerce. It triggered wider scrutiny of heritage claims in livestream commerce and contributed to regulatory tightening around KOL advertising disclosures. Crazy Little Brother Yang's domestic business stalled. The case is cited in Chinese marketing law discussions alongside the Coconut Palm ad fines as evidence that enforcement is catching up with livestream-era false advertising.
Sources
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