Have you ever been tempted by live stream hosts promoting "once-in-a-lifetime" discounts? Beware—you might be falling into the trap of "fictional original pricing," a deceptive practice that's becoming increasingly common in e-commerce and live streaming sales.
The Inflated "Original Price" Scam
Recently, Hangzhou Baohong Culture Media Co. was fined 50,000 yuan by regulators for fabricating product original prices. The company's live stream host promoted a double-sided clover bracelet priced at 139 yuan, claiming it "normally sells for 1,999 yuan," creating an illusion of massive savings. However, investigation revealed the bracelet had always been sold at 139 yuan, with no prior 1,999 yuan price point.
This "mark up then discount" tactic has become an open secret in e-commerce, particularly during major shopping festivals like 618 and Double 11. Businesses and hosts employ various price manipulation strategies that often leave consumers defenseless.
Celebrities Caught in Pricing Scandals
Even celebrities aren't immune to these practices. Actress Shu Chang faced public scrutiny after promoting gold jewelry in her live stream, claiming: "A gold bar like this would normally cost about 380,000 yuan—enough to buy an apartment in Shenzhen. But I'm offering these pendants and peace knots for just two-digit prices." Her co-host added: "These usually cost thousands, but we're giving them to you for two digits!"
The outrageous price discrepancy raised immediate suspicion. Investigative netizens discovered identical necklaces being sold for just 38 yuan on e-commerce platforms, severely damaging Shu's credibility as a live stream merchant.
Major Brands Face Penalties
Even established jewelry brand Chow Tai Seng wasn't spared. In July, its subsidiary Shenzhen Hulian Tianxia Information Technology Co. was fined 200,000 yuan for fabricating original prices. The company had advertised an 18K gold waist chain with a fictional original price of 2,060 yuan (discounted to 1,030 yuan) and a starburst bracelet allegedly reduced from 7,538 yuan to 3,980 yuan.
The Luohu District Market Supervision Bureau imposed the fine as both punishment and warning against such deceptive practices.
Regulatory Crackdown on Price Fraud
Authorities have been actively combating these fraudulent pricing schemes. Between 2020 and 2022, regulatory bodies issued multiple guidelines including the "Provisional Regulations on Standardizing Promotional Activities" and "Guidance on Regulating Double 11 Online Promotions" to establish market order.
Despite intensified oversight, many merchants continue to risk penalties by employing these deceptive tactics.
The Harm of Price Fabrication
Falsifying original prices constitutes price fraud that violates consumers' right to accurate information. Article 14 of China's Price Law explicitly prohibits "using false or misleading pricing methods to deceive consumers or other businesses into transactions."
Violators face corrective orders, confiscation of illegal gains plus fines up to five times those gains, or fines between 100,000 and 1 million yuan for cases without illegal profits. Severe violations may result in business suspension or license revocation.
Protecting Yourself as a Consumer
When navigating flashy discount claims in live streams, consumers should remain vigilant:
- Compare prices: Research identical products across multiple platforms
- Check price history: Use price tracking tools to verify actual discounts
- Resist impulse buying: Avoid being swayed by live stream hype
- Document evidence: Screenshot promotional claims for potential disputes
- Report violations: File complaints with platforms or authorities when encountering fraud
As regulators continue strengthening oversight of live streaming commerce, the industry must prioritize transparency and integrity to ensure sustainable development and genuine consumer benefits.