The "Battle" between L’Oreal, Austin Li and Viya

The "battle" between L'Oreal, the live stream anchors and consumers are becoming more intense. What should we reflect on over this issue?

As the fever of the Double 11 festival not faded yet, many businesses are still busy restocking inventory and delivering products to customers.However the after-sales end of L'Oreal, an internationally renowned beauty brand, is unusually "lively".

The cause of the incident was simple. On November 1, a Xiaohongshu user posted a note titled "257 yuan for 50 L'Oreal ampoule masks", claiming that he bought 50 L'Oreal ampoule masks at a low price of 257 yuan through official website coupons, beauty coupons, live streaming studio red envelopes, and cross-store discounts, etc. However, if he bought the same products in the live streaming studios from head anchors such as Austin Li or Viya, the price should have been 429 Yuan. Therefore, consumers expressed strong dissatisfaction with the price difference of more than 100 Yuan, and spontaneously rallied to protest and demand L'Oreal for refunds and apologies. 

According to the Black Cat Complaint Backend, the number of collective complaints about the L’Oreal price difference issue has reached 24,000+.

Yesterday (November 17), around 8:00 p.m., Austin Li and Viya posted a statement via Weibo about the price difference of L'Oreal ampoule mask, stating: "We have had several rounds of talks with the L’Oreal brand, but no agreement has been reached over this issue yet. If the brand fails to offer a reasonable solution within 24 hours, the live streaming studios will provide a compensation plan". Austin Li and Viya also expressed “We have currently paused the cooperation with L’Oreal”.

With all the complaints and pressure from customers returning the products, today (November 18) early in the morning L’Oreal finally made an appearance, and gave direct response regarding the issue.

In the statement, L'Oreal said “We deeply apologize to consumers for the troubles caused during the Double 11 by the cumbersome and complicated promotion mechanism of L'Oreal ampoule masks", and then explained that the low price of 257 yuan was a result of the "superposition of discounts from multiple platforms and stores", and that a single order must reach a certain total price threshold to enjoy these discounts. L'Oreal added that the brand greatly values the feedback from consumers and has immediately set up a special case team. In the near future, the brand will offer proper solutions on the premise of protecting the interests of all consumers concerned.

So far, this “storm” has not subsided yet and public opinion from all sides is continuing to ferment. # L'Oreal should apologize #, # China Consumers Association criticizes L'Oreal #, # Should L'Oreal give refunds for the price difference # and other related entries have currently become the trending topic. How should the conflicts among the brand, the live stream anchors, and consumers be resolved?

01

Why are Consumers Angry?

L’Oreal’s “Three Sins” during the Double 11

Different from the blaming and cursing at the initial stage of the incident, with the increase of the number of participants in the discussions, some "non-mainstream" views to support that L’Oreal is innocent emerged.

Some netizens think that there is no need for L'Oreal to refund the price difference, because many consumers did not pay "the time costs associated with buying the low-priced masks", such as waiting in line in the live streaming studios for coupons, planning for the strategies, opening up Tmall 88VIP, etc. Instead, they placed orders directly in the live streaming studios to save hassle. For this reason, they were not eligible for the extra discounts and the lower prices..

△The strategy arranged by a Xiaohongshu user for purchasing L'Oreal ampoule masks

at a preferential price

So, why are those consumers clamoring for a refund for the price difference so angry? The CBO reporter summarized three main reasons based on the feedback of netizens.

First, L'Oreal is suspected of "false marketing", which made many consumers feel that they had been "fooled".

Some netizens said that on October 13 L’Oreal’s official Weibo account posted an entry claiming that Austin Li’s Live streaming studio had the “biggest discount of the year”.At 14:16 p.m. on November 11 after the incident the text of "the biggest discount of the year" was removed. Now this post has been deleted.

Many consumers think that such behavior has violated the spirit of contract and will lead to the loss of the trust of consumers. If the consumers know that there will be more discounts coming up in the follow-up stage, they will not buy pre-sale products in the live streaming studios. The brand should have given consumers "discount options" rather than misleadingly telling consumers that the live streaming studio was offering the lowest price.

Admittedly, many businesses will increase discounts during the Double 11 period to achieve their performance objectives. However, it was indeed inappropriate that L'Oreal failed to strictly control the price, as the brand had made the promise of "low prices" prior to Double 11.

Second, the "coupon" repeatedly mentioned in this incident is also an important factor that has caused controversies.

Reportedly, the methods to receive the 999-200-yuan coupons released by L'Oreal this time were inconsistent. In September, the method released was "RMB one cent purchase", but at the beginning of October, it was changed to "receive coupon after referring to 25 friends". The coupons were released several times again via group chat around October 20 and then in the live streaming studios from November 1st to 3rd.

The coupon-collecting methods were so different that some people needed to prepare in advance as they had to gather 25 friends to collect the coupon. However, some people could collect the coupon directly in the live streaming studios at the very beginning of the Double 11, and more consumers knew nothing about it. Such "unfair" treatment was bound to cause public outrage.

The last factor was "sequela", a common phenomenon of the Double 11, including delayed delivery, slow logistics speed and even cases suspected of "false delivery".

Recently, the China Consumers Association criticized L'Oreal for "false delivery", saying that "no delivery provided after 10 days of payment" has become a typical case.

In Xiaohongshu a note about "Complaint about L'Oreal's False Delivery" has won nearly 10,000 likes and more than 5,000 collections. The blogger also complained about L'Oreal's poor after-sales service in the comment section, saying: "Since November 1, there has been no manual customer service, only robot customer service, or no service response, while the service prior to purchase is within seconds." However, some netizens said that the slow logistics speed was mainly due to courier service delays, and was not L'Oreal's responsibility, suggesting that people “should not be addicted to complaining”.

Although the issue of "false delivery" remains to be discussed, L’Oreal delaying the deliveries has been confirmed by netizens. A Xiaohongshu blogger posted a note on November 3rd saying that the purchase page showed delivery before the November 3rd, but L'Oreal said that as Haidian District in Beijing was a high-risk area, the order could not be delivered. However, a netizen commented that he also lives in Haidian District, and his order with the last payment paid onNovember 2nd was delivered early in the morning on November 3rd. Reasonably speaking, it is understandable that there were massive orders and insufficient stocks during the Double 11 period. It may be possible to gain consumers' understanding by presenting facts and reasoning, but L'Oreal's behavior of delaying delivery using epidemic as the excuse was quite puzzling.

In fact, this delayed delivery is not a unique case. There have been voices complaining of delayed delivery by beauty brands such as Winona, Zhuben, LA ROCHE-POSAY, as well as wrong delivery and delivery with missing items. Especially when sellers have adopted the strategy of replacing discounts with small samples, deliveries with missing items is very common. Getting nowhere by communicating with the "customer service robot", consumers can only complain through the platform to protect their legitimate rights and interests.

In addition, the phenomenon that the spot price is lower than the pre-sale pricein the live streaming studios does not only happen in L'Oreal stores. A netizen said that she bought two bottles of Bioderma makeup remover in Austin Li’s live streaming studio for 116 yuan, but with the coupons directly from the brand, the two bottles would only be 49.8 Yuan, and the price difference is more than 100%. Similar examples are too numerous to list.

Although L’Oreal became the target due to multiple issues during this Double 11 festival, in the background this just reflects many chaos derived from the Double 11 festival.

This makes us think: beneath the great sales numbers and seemingly bright appearance, has the Double 11 deviated from its original intention? Does it only focus on business data or does it truly working to benefit consumers?

02

The Monopoly Era of Leading Live Streaming Anchors is Gone?

BrandSelf Live Streaming Will Probably Become a "Weapon" for Gaining a Greater Voice

Apart from the conflicts between consumers and the brand, the incident has also triggered discussions about live streaming anchors, especially the position of leading anchors like Austin and Viya in the whole industry chain.

Netizens' views on anchors can be roughly divided into two categories. Some are of the view that the anchors work for the benefit of consumers: Austin and Viya should not be to blame for the incident, and the anchors should try harder to bring down the product price. Others are of the view that the anchors charges too many service fees, which is equivalent to the behavior of "two way merchants", and the brand should make the anchors less important by directly giving benefits to consumers.

In recent years, with the change of consumption habits and channels, live streaming become insanely popular. On the first pre-sale day of the Double 11 (October 20), Austin and Viya alone sold products worth more than 20 billion yuan, of which the former contributed 11.5 billion yuan and the latter 8.5 billion yuan, while the anchor ranking third only contributed less than 1 billion yuan. In this case the "monopoly" effect of leading anchors was fully displayed.

Because of this, there exist many hidden dangers in the live streaming industry. On one hand, anchors collect sky-high service fees and commissions, and on the other hand, they alsopush the brands to offer "the lowest price on the Internet" in order to consolidate their existing status and advantages, which leads to the fact that many brands can barely "get recognized by viewers" in leading anchors’ live streaming studios, and their profits are tiny.

In recent years, as more and more brands started to get their feet wet in self live streaming and expand more diversifiedlive streaming channels, self live streaming has gradually become a new “traffic password” to attract more traffic, which may make a dent in the status of leading anchors.

Some industry insiders believe that the purpose of L'Oreal's behavior of handing out coupons in their self live streaming studio may be to reduce its dependence on leading anchors and let consumers know that the brand’s self live streaming studio can offer greater discounts than the leading anchors’live streaming studios. 

Whether or not this view represents L’Oreal’s true intention, we must admit the fact that L'Oreal does have the hard power to do without leading anchors and "stand on its own feet".

The brand L'Oreal not only has the support from L'Oreal Group, the first 10-billion group of Tmall Double 11, but also ranks top in terms of its own brand power and product power. Reportedly, during the Double 11 period this year, L'Oreal's total revenue reached RMB 1.5 billion, ranking first among the beauty shops of the mass line, and despite the controversy the ampoule masks that triggered all the discussions had RMB 500 million of sales.

Whether intentionally or unintentionally, this L’Oreal incident has really "inspired" a group of netizens to notice and re-recognize the brands’official self live streaming studios, and has also triggered hot topic discussions among consumers. Some consumers began to "criticize" the anchors and appealed to the brands to sell products through brands’self live streaming, thus saving the fees paid to anchors, and give the benefits to consumers instead.

It is worth noting that the State Anti-Monopoly Bureau was officially unveiled in the office building of the State Administration of Market Regulation today (November 18), demonstration its determination to "improve the anti-monopoly system and mechanism, consolidate the anti-monopoly law enforcement system, strengthen the anti-monopoly regulation force and effectively standardize the market competition behavior".

With the revolutionary horn of "brand rebellion" blown up ahead and a "heavy punch" struck from behind at the national level, is the prime time of leading live streaming anchors about to usher in a turning point? Can the strong binding relationship between the brand and leading anchors be loosened? Maybe the next Double 11 will be the answer.