Increasing engagement in influencer marketing in China's online market could cause trouble for consumers and challenge regulators.
For Zhu Mei, a Beijing-based media industry employee, online product reviews used to be the most important factor when deciding what to buy. But now she gets frustrated with the reviews, as many of them are recommendations made by retailers and platform operators, not real consumers.
The exaggerated reviews could potentially mislead consumers, and sometimes the products are fake ones.
"The main problems I think consumers face would be counterfeit products, which I believe to be low-quality products, so I tend to avoid these," said Alexander Farmer, a public relations agency employee. "I make my judgments based on pricing and based on the source."
Meanwhile, new types of promotion, such as those carried out via "private traffic," for example, personal WeChat accounts and private WeChat group chats, are making quality control very difficult.
In most cases, the influencers are not business owners, and they easily get commissions without facing potential consequences, even if the products they sell are counterfeit, said Tang Jiansheng, deputy secretary-general of Shanghai Consumer Council.
Tang said, while the traditional e-commerce model is already pretty mature, there are still problems at the technical and operational levels, especially in the private traffic-driven area.
"We need a feasible solution, or it'll be difficult for us to monitor the trading behavior on that front," he explained.
Consumption is the backbone of China's economy, with online shopping as the mainstay. Total retail sales of consumer goods in 2020 were nearly 40 trillion yuan (about $6.16 trillion), almost 40 percent of China's GDP.
Experts say effective market regulations and a healthy relationship between retailers and consumers are needed to safeguard and improve a healthy consumption ecosystem.