Three Sheep (三只羊网络科技有限公司): mooncake scandal shrank ¥1bn livestream empire to ¥250k/stream

Three Sheep rode the comedy-livestream format of brothers 'Crazy' and 'Big' Little Brother Yang to the top of Chinese live commerce, with flagship streams routinely selling tens of millions of yuan and its top apprentice 七老板 the first Douyin streamer to pass ¥100 million in a single month. The entire model rested on one personality's audience trust.

The trust broke in September 2024 over 'Hong Kong Meicheng' mooncakes sold as a Hong Kong brand. On October 11, 2024 the company paid fines and confiscation worth ¥68.9 million, plus ¥27.8 million in 'refund one, compensate three' payments, and the brothers went silent — a suspension that lasted 16 months while the brand's matrix accounts lost over 17 million followers.

The comeback never recovered the scale. A self-operated 小杨臻选 app launched in April 2025 with a ¥99-a-year membership drew only modest audiences, and its e-commerce store added just over 1,000 orders in its first week. When Three Sheep accounts returned to Douyin in September 2025, three streamers together sold about ¥500,000 of garbage bags in an hour; the flagship return on January 12, 2026 ran four hours for about ¥250,000 in sales at a peak of 3,900 concurrent viewers, and lost 18,000 followers that day. By the end of January 2026 七老板 and 卓士琳 had announced their exits.

Replaced star appeal with a faceless app and roster, but comeback streams drew only ¥250,000 versus the old tens of millions, after a ¥68.9m fine and 17m followers lost.

The entire business was one personality's trust: when the mooncake scandal broke, the brothers' 16-month silence emptied the audience that had driven ¥100m+ monthly streams.

Three Sheep's own supplier and certification controls failed on the mooncake claim, handing regulators a ¥68.9m fine and a rectification order that froze the brand for over a year.

The de-IP pivot to a self-operated app and a faceless streamer roster replaced star appeal with nothing equally saleable — comeback revenues ran at a fraction of the old scale.

A livestream empire built on one person's trust dies with that trust. A ¥68.9m fine and 16 silent months cut its streams from tens of millions to ¥250,000; no app brought the audience back.

Three Sheep met Hefei's 89 rectification measures and was cleared to resume in March 2025, but re-entered a transformed market: blind-box and speculative livestreams were being cut off and regulators had begun reining in refund-only. The brokerage of its co-founded e-commerce unit at a $975 million valuation in early 2026 became the brand's exit path, selling the name it could no longer fill with its own stars.