On April 9, the operator of Zhang Ting and Lin Ruiyang's brand "TST Court Secret" was determined by the market supervision department to constitute an illegal act of organizing and planning pyramid schemes.
According to the Administrative Penalty Letter of Baokang County Market Supervision and Administration Bureau, from January 2018 to July 2021, the main operating income of the red card of Dalvy Company was 9.171 billion yuan, the main business cost was 5.646 billion yuan, the main business tax and surcharge was 37.4481 million yuan, the actual related expenses incurred were 3.458 billion yuan, and the income tax expense was 10.4636 million yuan.
In the end, Darway was required to immediately stop the pyramid scheme and confiscate 19.28 million yuan of illegal gains and fined 1.7 million yuan. A total of 20.98 million yuan was confiscated.
The once glamorous queen of micro-business is now crumbling.
Pay 1.2 billion taxes in a single year,
How much money did Zhang Ting make from micro-business?
In 2014, Zhang Ting played Wei Guifei in the hit drama "The Legend of Wu Meiniang", and many people predicted that the Taiwanese actor, who had been moved by dimples, was about to usher in the second spring of his career. At the age of 21, Zhang Ting cooperated with Zhao Yazhi and Zheng Shaoqiu in "Joke about Qianlong", which became popular in one fell swoop; after turning to the mainland entertainment circle, he filmed "Love Through Time and Space", which influenced a generation of people, and successfully opened up the market in both sides of the strait and three places.
After regaining the attention of the public with the role of Wei Guifei, Zhang Ting had no intention of continuing the road of acting as an actor, but instead made a gesture of saying goodbye to the entertainment industry and concentrated on selling masks and skin care products. In 2013, Zhang Ting and her husband Lin Ruiyang secretly brought their own brand TST Ting to the mainland and founded Shanghai Darway Trading Co., Ltd. (hereinafter referred to as Darway).
After 2014, Zhang Ting rarely appeared in new film and television works, replaced by her identity as a "micro-business godmother". Compared with the ups and downs in the entertainment industry, TST has brought Zhang Ting and Lin Ruiyang a larger and more stable income. According to public information, from January to September 2017, Dalway completed operating income of 3.6 billion yuan and achieved a net profit of 1.143 billion yuan, just like a rising micro-business giant.
In 2019, a press release said that Zhang Ting and his wife paid more than 2.1 billion yuan in a single year to create a business. Although this rumor has not been verified, on the official website of the Shanghai Qingpu District Economic Committee, we can see an equally staggering amount of tax payment: 1.2 billion.
According to the Oriental Network, Shanghai Darway Trading Co., Ltd. is the "tax champion" enterprise in Qingpu District in 2018, with a tax payment of 1.26 billion yuan. After being qualified as a pyramid scheme company, according to the "Baokang County Market Supervision and Administration Bureau Administrative Penalty Decision", Darway Company's total revenue reached 9.1 billion yuan in 42 months.
Like most micro-business owners, Zhang Ting and Lin Ruiyang have never been soft on showing off their wealth.
On Zhang Ting's birthday in 2017, Lin Ruiyang spent 1.7 billion yuan to buy a 19-story office building in Shanghai's Xuhui District as the company's headquarters; in addition, the couple had a mansion in Shanghai's Shanghaiwan Haoting, an old mansion located in Xuhui Riverside, only 50 meters from the Huangpu River, with a first-line river view. The total area of the mansion is as high as 1650 square meters, according to the average price of the second phase of the house of 120,000 yuan / square meter, Zhang Ting's luxury house market value of at least 200 million.
Paying salaries to employees is also very generous, and the two have publicly stated that they will send out 500 million yuan a month "separate wages" a month. In 2018, at the company's annual meeting, Zhang Ting distributed red envelopes on the spot and issued 10 months of year-end awards.
TST stuck in the "rotten face door"
In 2016, because of product quality problems, TST was caught in a huge public opinion controversy for the first time. Ms. Cui, a user, broke the news through the media that she had a serious bad face after using TST's skin care products.
Miss Cui found the customer service of the micro store, and the answer was: "Dear, you are detoxifying, many customers have this phenomenon, the product does not have any problems." Later, she found a number of agents to consult, and finally it was still not resolved.
This is not an isolated case, in February of the same year, Weibo user @Happy Week Ya Yapo posted a photo of his bad face "disfigured" after using TST products. She wrote on Weibo that after using TST, the originally smooth and smooth skin appeared red, swollen, itchy and exudative, and was diagnosed as "dermatitis" by the hospital. Similar complaints can be found on the "Black Cat Complaints" website, most of which are attached to their shocking "bad face" photos.
In the face of doubts, Zhang Ting pointed out categorically that all this has nothing to do with TST's products. She posted a long article on Weibo, in which she mentioned that TST is a very formal skin care product: "TST products are complete in accordance with the law and have three certificates, and there are professional third-party inspection and quarantine agencies to do health and safety tests." Each user's skin type is different, so it will react differently to cosmetics. ”
TST made its fortune in the early years by "live yeast", and official propaganda has always emphasized that products contain "live yeast". Zhang Ting also publicly stated in the variety show that this is the "secret recipe for staying in the face" that Lin Ruiyang specially brought back for himself from France, and he has been using it for 19 years.
The Mainland's Technical Specifications for the Safety of Cosmetics (2015 Edition) clearly stipulate that the total number of molds and yeasts in cosmetics cannot exceed 100 CFU/g (or CFU/mL). Some international big-name products also indicate yeast ingredients, but most of them are yeast extracts, not live yeast.
Obviously, if TST's products really contain live yeast, they cannot pass quality inspection; if they do not contain live yeast, then it is false propaganda.
Some netizens found information on TST-related products on the official website of the State Food and Drug Administration, and among the 43 products, 30 products were marked "not filed", and 31 products were marked with "ordered to correct". According to the regulations, the products ordered to rectify cannot be sold until they pass, but these products of TST have been sold in the circle of friends.
MLM model under the star effect
Another controversy about TST is whether its sales model is MLM. In 2019, The Paper pointed out in the report that its marketing method is similar to the return model of multi-layer differential commission similar to pyramid schemes.
In the promotion of TST, the "low threshold" is its repeated emphasis on entrepreneurial advantages. "Zero cost, zero hoarding, zero inventory", every transaction completed, you can get the corresponding rebate. In addition, TST often lets agents publicize their "monthly income of tens of thousands" and "earn a suite in a few years" in the circle of friends, such an easy and convenient way to make money, so that countless people choose to join TST as an agent.
It is not difficult to become a TST agent, there is no need to pay fees, as long as you register your personal information on the Court Secret App, you can join the TST family. Joining does not mean that you can earn money, and TST's secret membership cards are divided into multiple levels, temporary cards, blue cards and red cards. Temporary cards can only be consumed, and Blue members can enjoy 9.25% discount and 15%-32% rebate. If you want to go one step closer to becoming a red card member who can develop the downline, you need to pay 2500 yuan out of your own pocket to buy TST's products.
When an agent becomes a red card member, the upper family will continue to tempt them, "the son (synonymous with 'offline') is enough for 100 people to be a founder, register a company, and be the chairman, so as to earn money." If you want to become an "original shareholder", it is not enough to have 100 downlines, but you also need to stock up on 300,000 yuan of products in 3 months.
According to the "Daily People" report, an agent fell into the trap step by step, and finally swiped his credit card to hoard 300,000 worth of products at home and became a chairman-level agent. But in the five years she was an agent, she didn't earn a penny.
Letting agents set up new companies on their own is an important means for TST to avoid the risks of MLM. The current mainland law defines "pyramid scheme" as an agency level of three or above, and the best way to reduce the level of agency is to set up a new company. According to the official website of TST, as of April 2021, TST has as many as 212 branches nationwide to declare individual tax for agents.
Although they have not been able to make money, many of TST's agents have persisted for four or five years, and one of the important reasons is the star effect of Zhang Ting and Lin Ruiyang, which is also different from other micro-business or MLM organizations.
In addition to taking advantage of the couple's own prestige, Mr. and Mrs. Zhang Ting often invite celebrity friends to stand for TST, and many people have posted pictures of their use of TST products on social media. Many agents mentioned a sentence in later interviews, "They are stars, how can they lie?" ”
Several celebrities have stood for TST
Within TST, Zhang Ting and Lin Ruiyang have a god-like status in the hearts of employees. Lin Ruiyang once organized employees to celebrate the Lapa Festival together, and a female employee knelt in front of him on the spot, saying words of blessing while waiting for him to fill himself with a bowl of porridge. At an offline meeting, a female agent saw Zhang Ting and directly cried and fainted.
"Taking a photo with a star boss" is a supreme honor in the hearts of agents. Only when the monthly performance reaches a certain amount (more than 20,000 is reported) and a certain number of downlines have been developed, the agents are eligible to take photos with Lin Ruiyang and add to his WeChat. Lin Ruiyang wrote in the 2019 publication "Lin Ruiyang Farewell to Lin Ruiyang" that over the years, "I and micro-businessmen took about 600,000 photos one by one."
It is more difficult to take a photo with Zhang Ting, and only employees with monthly performance of one million or ten million have a chance. In the hearts of the agents, compared with the kind and grounded Lin Ruiyang, Zhang Ting is the goddess in everyone's heart, "combining beauty, wealth, talent and kindness" in one.
Regular corporate events held each year also increase the stickiness of the agents. According to the Red Star Capital Bureau, every time TST holds an event, it will let the agents who have successfully made money come to the stage to tell "how they secretly changed their lives through the TST court".
After 2019, with the rise of the micro-business model and the live broadcast of goods, many micro-businessmen who once brushed the screen in the circle of friends began to shift the camp of selling goods to the live broadcast platform. Zhang Ting and her TST are also among them.
In June 2020, Zhang Ting took TST into Douyin Live. Before the debut of Douyin live broadcast, Zhang Ting and Lin Ruiyang had done a large-scale agent mobilization, announcing that TST would open 5G live broadcast with goods. Agents at all levels have mobilized their own downlines and guided fans to Zhang Ting's live broadcast room to trade deals.
The debut was ultimately very successful, in the five-hour live broadcast, the peak number of online people reached 520,000, the cumulative number of views was 18.94 million, and the final increase was 1.18 million, with 136 million goods, of which TST sold a total of 26.7 million.
The unique community stickiness of micro-business makes TST's live streaming journey very smooth. Pin cat new retail once counted, searching for the keyword "Zhang Ting" on Douyin, pop-up more than 300 accounts related to TST product content, most of which are TST dealers.
The collapse of the "micro-business empire"
According to a number of media reports, in early 2021, several TST agents realized that they might have been deceived, so they found Li Xu's anti-fraud team on Weibo. Li Xu has received many complaints from netizens about TST's suspected pyramid schemes, but has been lacking key evidence. Several agents approached Li Xu and provided him with key information, including TST's bonus system and some important screenshots.
After reading the information, Li Xu confirmed that the TST model was in line with the characteristics of MLM, and he suggested that an agent report to the Shijiazhuang Market Supervision and Administration Bureau. According to the Regulations on the Prohibition of Pyramid Schemes, on June 5, 2021, the Bureau opened an investigation into Shanghai Dalway Trading Co., Ltd. for suspected pyramid schemes. At the end of 2021, TST was exposed to suspected pyramid schemes and was investigated.
Late last year, we contacted a former agent of TST who commented on a TST video about TST, saying that she had been brainwashed by the company and had defrauded a lot of money. But when we asked further if we could accept the interview, she politely declined us on the grounds that she was "afraid that our families would be affected."
In the early morning of December 29, 2021, TST officials sent a Weibo response, saying that "Shanghai Darway is a legally operated company" and that "the company is currently operating normally". Zhang Ting and Lin Ruiyang retweeted the weibo, but soon, both of them and TST's official Weibo account were banned.
Since then, despite the storm of public opinion, the TST Court Secret Mall is still operating normally, and all products can be placed normally. Although the Douyin official banned Zhang Ting's account, it failed to block other agents. Many agents scroll through Zhang Ting's advertisements in their live broadcast rooms, trying to carry goods in a new way.
The only difference is that the once lively agent group chat is now much more deserted and low-key, and many agents have begun to move to other similar projects.
Resources:
Daily People: Family, Tricks and Dreams, How Zhang Ting Lifts up the Micro-Merchant Empire
Red Star Capital Bureau: From the bottom of zhang ting couple company: two months to hold a "brainwashing" activity, some people have not earned money for 5 years
The Paper: From the bottom of Zhang Ting's micro-business empire, "paying 2.1 billion taxes a year"
Edit: Echo
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