Controversy Ensues After Flower Knows Breaks Prices
- Chaileedo Press
- Sep 2, 2022
- 3 min read
Another brand has screwed up due to the lowest price on the whole network.
Recently, the positioning of girls' makeup Flower Knows debuted new products Strawberry Rococo Series in Tmall and Tiktok China’s official flagship store.
On August 27, Flower Knows cooperated with the anchor Meishuimeimei, who has 1.517 million followers in Tiktok China and put their exclusive new product gift box up for selling in Meishuimeimei’s live e-commerce. And Meishuimeimei claimed that was the lowest price in the whole online channels, priced at 298 yuan ($43.17). But in the early hours of the morning, some fans found that in the live e-commerce of another anchor with 356,000 fans in Tiktok China "Yaojiayou", the same gift box is priced at only 248 yuan ($35.93).
As the incident prevailing, Flower Knows and Meishuimeimei responded separately. Both parties emphasized that the brand was unaware of the broken price (i.e., below market price) caused by the self-subsidization of other anchors. Meanwhile, according to Meishuimeimei, she signed a price guarantee agreement with the brand, and lower price than it cannot be received on the whole platform within 90 days.
However, the anchor "Yaojiayou" said that the brand was aware of his price-breaking behavior, and on August 28, uploaded an "internal verification letter" from Flower Knows on the matter.
In this regard, an innovative skincare brand manager told CHAILEEDO that the top anchors who can get the lowest price will not allow this subsidy breaks their price, even if other anchors have the idea of self-subsidized, this is generally not permitted.
In this way, this break price fiasco shows that there are loopholes in the live stream control and price guarantee constraints of Flower Knows.
In fact, "the lowest price online" has caused a lot of controversies. For example, in last year's Double 11 shopping festival, Li Jiaqi and Viya had a falling out with L'Oreal Paris over the "lowest price online of L'Oreal Paris mask" event. In 2020, Luo Yonghao was also named by the Chinese Consumers Association for claiming that a product was " the lowest price online", while it was actually more expensive than JD, Tmall, and other platforms.
The top anchors have been relying on "the lowest price online" to attract attention and win traffic. The rest of the small and medium anchors, in pursuit of lower prices, do not hesitate to subsidize by themselves, to gain a sense of existence.
The aforementioned innovative skincare brand manager also said that to strengthen live stream control and price guarantee constraints, anchors will not recklessly make disorderly price behavior. The brand has to have a bottom line, and it also has to work out accounts in terms of cooperating with anchors.
Such a phenomenon has also attracted the attention of the relevant departments. On July 13, the Shanghai Administration for Market Regulation issued the Shanghai Webcasting Marketing Activity Compliance Guidelines. It is clearly pointed out that operators in the platform should not be required to sign the "lowest price agreement" or other unreasonable exclusivity mandatory terms. The introduction of the policy was supported by many brands. Although it is a local policy, it means the attitude of the relevant departments, which has a profound impact on the orderly development of the industry.
All signs show that is because too many marketing "tricks" lead consumers to lose trust in the brand. If this situation is not improved, the brand must be affected.
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