CNBC Exclusive | May 23 — A high-stakes legal showdown between Chinese e-commerce giant JD.com and influencer Xu Jiayi, widely known as “Cat Cup,” is set to unfold on May 29 at the Binjiang District People’s Court in Hangzhou, underscoring the financial risks brands face in influencer partnerships gone awry.
Corporate records reveal that JD’s subsidiary, Guangxi Jingdong Xinjie E-Commerce Co., filed a contract dispute lawsuit against Hangzhou Sermoon Network Technology Co., the company controlled by Xu. Sermoon, established in January 2023 with a registered capital of 1 million yuan ($138,000), lists Xu as its ultimate beneficiary.
The case takes on added intrigue amid revelations that Xu’s accounts published a sponsored promotional video for JD.com just one day before Chinese authorities exposed her viral “lost homework” hoax as fabricated content. The notorious video, which falsely claimed a Chinese student’s homework was found in a Paris restroom, ignited a firestorm of criticism last February and led to Xu’s eventual downfall.
Prior to her April 2024 platform bans, Xu commanded a social media empire exceeding 40 million combined followers across Douyin (19.1M), Kuaishou (583K), Xiaohongshu (697.5K), Bilibili (481K), and Weibo (121.4K). Industry analysts estimate her annual revenue at nearly 100 million yuan ($13.8M) during her peak.
The legal action arrives 13 months after Hangzhou police penalized Xu and her team for spreading misinformation, resulting in platform-wide account suspensions. Experts suggest JD’s lawsuit likely revolves around breach of contractual obligations or reputational damage, given the proximity of her advertising content to the scandal’s exposure.
This case highlights the precarious balance brands strike between influencer reach and reputational risk, particularly in China’s $200 billion social commerce sector. As platforms intensify scrutiny on MCN agencies, the outcome could set precedents for liability in influencer marketing contracts nationwide.
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