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The encyclopedia · Advertising & PR · Marketing decision · 2024–2025

Xinxuan Group paid ¥2.07M in fines for fake health claims — the third round

Xinxuan claimed its milk powder could cure illness and its patches treated ailments — regulators fined it three times between 2020 and 2025.

Xinxuan Group · 2025-02-06

What happened

Xinxuan Group, founded by super-livestreamer Xin Youzhi (known as Xin Ba), is one of China's largest livestream e-commerce operators. Between 2024 and 2025, its companies were fined three times for false advertising in livestreams, with regulators repeatedly finding that products were promoted with unsubstantiated health claims.

In February 2025, Guangzhou Xinxuan Network Technology was fined ¥1.75 million by Guangzhou's Baiyun District market regulator for false advertising during an October 2024 livestream. Xin Ba and his protege Egg promoted Hepuno formulated milk powder as capable of treating rhinitis, fever, bad breath and urticaria, and claimed it could boost immunity within hours. The same broadcast also featured exaggerated claims for the Jiuzhitang herbal patches and Ai Lebei Jia Aibike products.

Later in 2025, another Xinxuan entity was fined for continuing the pattern with more unverified health claims. The company had already been fined ¥900,000 in 2020 for falsely marketing bird's nest drink as containing real bird's nest. Despite promising reforms after each penalty, the false advertising resumed. The cumulative ¥2.07 million in fines is small relative to Xinxuan's revenue, but the pattern earned it a reputation as a repeat offender in China's livestream regulatory crackdown.

Why it happened

  • Health claims drive conversion in livestreams — exaggerating efficacy is the fastest way to sell supplements
  • The fine was small relative to revenue, creating no economic deterrent against repeating the behavior
  • Xin Ba's comeback narrative incentivized aggressive sales tactics to recover audience and revenue
What it cost¥2.07M in fines + ¥900K (2020)costly

The lesson

A fine small relative to revenue is a license fee, not a deterrent — repeat offenders price penalties into their cost of operations.

Aftermath

Xinxuan announced refund programs after each penalty — including over ¥10 million for the 2020 bird's nest scandal — but the false advertising resumed in 2024–2025. Each fine was published by the State Administration for Market Regulation as a typical case, adding reputational damage on top of the financial penalty. The pattern led to industry-wide scrutiny of health product claims in livestream commerce.

Sources

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