Viya hosted sales to promote Xinjiang cotton for public interests. She sold 23 million yuan worth of product of Xinjiang cotton in one hour and 12 million people watched it. She did not charge any fee for this service.
The queen of live-streaming, Ms. Viya, is a success story of hard work and smart decisions, but just as Jack Ma experienced, reaching billions in both customers and sales leads you down a thorny one-way road of consequences.
I had never heard of her, until Monday.
The melon is so big that even the overseas media reported her tax evasion case. There is no equivalent of Viya in the west.
Viya is a 36 year old business woman. She started selling clothes at only 18 years old in Beijing, in a famous fashion whole sale district. That’s also when she met her husband.
Later Viya participated in talent show and won. She had some success in the music industry. In 2008, she went back to sell fashion with her husband in Xi’an.
In 2013 when e-commerce took off, she closed her retail shops and started a shop on T-mall (website of official flagships shops hosted on Taobao), however, she lost lots of money.
In 2016, when Taobao started Taobao Stream, she was among the first to join.
Taobao Stream was a new platform that Taobao built to attract consumers to buy more by using videos to promote products. Instead of hiring advertising company and buying TV ads, companies pay Taobao Stream hosts to talk about their products in hopes to encourage viewers to buy.
The platform worked, and Viya was one of the stars that made the platform successful.
In 2018, she made 700 million yuan (100 million USD) sales and 30 million yuan (4.7 million USD) of income, she was also the top seller on Taobao.
In 2019, during the November-11 sale (Chinese equivalent of Black Friday), she made sales of 3 billion yuan (470 million USD).
According to this Chinese media article, in 2020, she made sales of 20 billion yuan.
Of course, she isn’t just one person.
According to her Wikipedia page, she owns a company of 200 employees. Her success is not accidental.
She only slept 3-4 hours a day, and hosted 350 live broadcast episodes per year. She received 1000 product requests a day, and her team would review each product. Only the products that passed the three stages of review could end up on her desk, she would then try them personally before including them in her broadcasts.
Even if you don’t understand Chinese, watch this 3-minute clip on youtube on how she sold thousands of silver bracelets within seconds. The bracelets were made by ethnic minorities who were living in poverty, so this won her an award by the Chinese government for helping the poor.
Her company also has 50 up-and-coming streaming hosts, and is expanding to be an entertainment business. In 2021, she and her husband even started a private equity firm.
I said that there was no equivalence of Viya in the west because her speedy rise in fortune is astonishing. She is like 20 years of Kim Kardashian and Martha Stewart concentrated in 5 years.
People who dislike her call her a pig, because there is a Chinese saying, “when in the right wind, even a pig can fly”. Viya is in the right wind of the rise of e-commerce of Taobao, and she promptly took off just like the pig. There is part of truth to it.
In Chinese slang, the way you make your living is phrased as the meal you eat. If you actively participate in patriotic propaganda to please the CCP, you will be rewarded with business opportunities. People call it “eating the pariotic meals”.
No one in China can be successful without being super patriotic. It is a basic requirement in the current environment in China now.
Viya is no exception. She is so big that she must have had to.
When Xinjiang cotton was boycotted by the west, Xinhua reported:
Viya hosted sales to promote Xinjiang cotton for public interests. She sold 23 million yuan worth of product of Xinjiang cotton in one hour and 12 million people watched it. She did not charge any fee for this service.
July 1st of this year marked the centennial anniversary of the founding of CCP, and Viya showed her support on her Weibo account.
She also has been awarded multiple times for being an examplar business woman.
(Top, she was the embassador of honesty for the year 2022, and 2021. Bottom, she was awarded for helping the poor, and for helping to fight covid).
Viya is a smart woman. She manages her relationships with different levels of the government well. She often appears on TV, sitting next to government officials. But she is not safe, just like anyone else whose last name is not Zhao.
Last name Zhao is another internet slang that became popular in recent years. It came from a famous novel by modern writer of China, Lu Xun. It refers to the real boss of the society. In current China, the Zhaos are the offsprings of founding members of CCP revolutionaries. The dear supreme leader is a Zhao. But not everyone in high power is a Zhao. Some of them are just servants of the Zhaos.
Viya got western media attention because of the astronomical amount of tax evasion. It is about 700 million Yuan (100 million USD). How did she manage to do that?
First, you need to know that according to a public record, she made 5.7 billions of Yuan over the span of two years, mostly by taking a cut of about 20-26% of the sales she made.
Some western media evaluated her family net worth to be about 9 billion yuan.
When Hangzhou government announced the fine, Viya’s husband published a public apology, admitting all wrong doings and taking responsibility. He said:
"We knew that we lack professional skills in tax matters, so in 2020 we hired an accounting firm to manage our taxes. However, we found out that even those firms could be wrong. After hiring better accountants, we discovered the risk exposure of our tax management. Since November 2020, Viya is paying the 45% personal income tax, and we are making up the tax shortfalls we owed. "
The letter disclosed that Viya was trapped in the grey area of Chinese tax code. The tax rate for company profit is 20%, and for personal income, it is 45%. It seems that the government decided to fine her for not paying the rate of personal income between 2019 and 2020.
At the end of the letter, the husband hinted that the ambitious career of Viya as a stream host is over.
Freshly off from the melon of Wang Leehom on Monday morning, the bomb dropped on Viya during the afternoon was overwhelming for Chinese melon eaters.
Wang Leehom: who would have thought that the last big melon of the year is me! ?
Viya: hmmm, did you think of me?
The moment the tax fine of Viya came out, Wang Leehom's melon loses all its flavor. The two fought so ugly, and the families got involved, but the amount of money was not even a fraction of the tax fine. Look at Viya, she admitted wrong doing right away! Hong Kong and Taiwan have really declined!
3)Stars in the pictires from left to right:
Famous Chinese actress Fan Bingbing who was fined 884 million Yuan for tax evasion in 2018, before she was disappeared for almost a year.
Chinese actress Zheng Shuang who earlier this year was fined for 299 million yuan of tax evasion. She is on the hiring black list of Chinese movie studios, the same treatment as Kris Wu, the Canadian star who has a rape charge. A few weeks ago, someone claiming to be Zhang Shuang showed up on twitter. She claimed that she was safe away in America. She commented on the situation of the grand slam winner.
Viya, tax fine of 1.3 billion yuan.
People made the equation at the bottom: 1 Viya = 1.5 Fan Bingbing = 4.5 Zheng Shuang.
People also calculated that Viya’s fine is equivalent of 9 divorces of Wang Leehom.
Someone found a comment from a very famous lawyer Chen Youxi on Weibo to criticize the legal system. The comment is being shared in light of the Viya tax fine.
(rough translation)
[how crimes are decided by the legal system]: it is not that whatever happens must be real; all entrepreneurs are trapped in this situation. If you have never been there, have never been a high level executive in a company in China, you can't possibly understand it.
It is not that someone plotted to violate the law, it is the very design of the law that makes everyone guilty, so that every entrepreneur of any company is working with their hands tied. The economy can't go on like this.
How does the Chinese tax system work?
First, let me introduce the Fake Case against Ai Weiwei that took place in 2011.
Ai Weiwei was famously disappeared for 81 days. Under intense international pressure, he was released but charged with tax evasion. He was fined for 15 million yuan.
Back then, Chinese society was vibrant and people were free to take actions to show their support. So, many people started throwing physical cash into Ai Weiwei’s studio garden, to help him pay the fine. This gave Ai an idea. He started issueing IOU notes to people who lent him money to pay for the fine. And he managed to pay the fine this way. Later he returned the money to those who sent back the IOU notes, however some chose to keep the note as an art work instead of being paid back.
This story tells you how most Chineses view the tax evasion charges from the government.
Similarly, today, many people think, no matter what you do, what belongs to the Zhaos will be returned to them. Everyone and everything in China belong to the Zhaos. Viya made her fortune but it was never hers.
People think the Zhaos fed the pig fat and then slaughtered it for dinner.
Viya is a very savvy business woman. She is very shrewd and does all the right things; how could she make the stupid mistake of evading taxes?
Her tax team are not exactly nobodies she picked up from the street.
Some seem to believe she really had no wrong doings.
Probably not much. No matter what happens, there are always millions of people who will want to make it like Viya.
In the past, local governments collected money by selling land to developers. As everyone knows, the real estate market is in trouble right now. Local governments need to get money from elsewhere.
Many speculated that the Hangzhou government is motivated by fiscal need.
A few weeks ago, social media discovered complaints from government employees about pay-cuts in multiple cities.
A Hangzhou government employee was complaining that her salary was cut by 25%. It was not verified, because in China, such news is shunned by media outlets. Still, the story was widely circulated on social media.
Someone spotted this local government site:
It says:
Central Commission for Discipline Inspection claimed that, in principle, it is not a violation of the rules when government employees drive Didi or work delivery jobs.
The Central Commission for Discipline Inspection is the highest internal control institution of the Chinese Communist Party (CCP). Its directives are laws that CCP members and government employees must obey.
Remember the story about the blessing of flexible employment? It seems that the government employees are now enjoying the benefits too.
The huge fine was a shocker, but even more shocking is the prompt shutdown of her social media accounts. Millions of fans lost. A business empire vanished.
Many people are asking, why? Why not let the legal course take place and why rush to destroy her business?
This all happened so sudden. Viya was still scheduled for a 7pm live streaming yesterday until her channel got shut down.
Honestly, no one understands why.
I can offer some speculations.
CCP does not like anyone to be too powerful. It does not trust anyone. No matter how you perform, a non-Zhao will be curbed once he/she reaches certain size. Perhaps the best example is Jack Ma, the founder of Alibaba, which owns Taobao. After disappearing for a long time, he finally got out of China and now hides in Mallorca. Lots of business owners see it this way.
Following a list of famous actresses and streamers that got similar tax evasion charges, Viya is just one more powerful woman being punished for being too capable. These charges aimed at women are part of the campaign to force women into their traditional roles in the family. Some Chinese feminists argue this way.
Could it be that some people high up wanted some “favor” from her and she refused? Given that the grand slam winner just showed up in some video recently, we are constantly reminded that some powerful people in China can do whatever they want and punish those who dare to not obey.
The most crazy speculation I saw on social media is about Madame dear supreme leader. It claims that Madame plans to come out to cheer for the Winter Olympics and dislikes any powerful women who share the limelight with her. So the purge of beautiful, famous women is the reason of Viya’s fall. This one is actually easy to check: we will know soon in coming days.
And that was for the melon of the day. Would there be yet another bigger Melon before 2022 ?