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Introduction
China’s influencer marketing ecosystem—spanning platforms like Xiaohongshu, Douyin, and Bilibili—offers unmatched reach and consumer trust. However, the landscape is now tightly regulated. For overseas brands, understanding influencer marketing laws isn’t optional—it’s essential to avoid reputational and financial risks. This article decodes key compliance areas for engaging KOLs (Key Opinion Leaders) legally and effectively in China.
1. Disclose Sponsorships Transparently
1.1 Mandatory Labeling of Paid Partnerships:
Chinese regulators require influencers to clearly mark sponsored content. Phrases like “广告” (advertisement) or “品牌合作” (brand collaboration) must be included in captions or overlays.
1.2 Platform Enforcement of Disclosure:
Douyin and Xiaohongshu monitor and penalize hidden promotions. Posts without proper labels may be removed or lead to account penalties, impacting campaign performance.
2. Follow Tax Regulations for Influencer Payments
2.1 Withholding and Reporting Obligations:
Brands working with Chinese influencers must ensure taxes are properly withheld and reported. Influencers are considered independent contractors under PRC tax law, and payments must be declared.
2.2 Red Flag: Cross-Border Transfers Without Tax Compliance:
Paying influencers via offshore accounts without declaring tax in China can result in legal issues for both parties. Brands should use local agencies or cross-border payment platforms with compliance tracking.
3. Avoid Prohibited Promotional Content
3.1 Restricted Categories and Sensitive Claims:
The advertising law prohibits false health claims, exaggerated results, or references to national symbols. Avoid using words like “最好的” (the best), or unverifiable data claims without evidence.
3.2 Platform-Specific Content Censorship:
Xiaohongshu bans certain skincare and food ingredient mentions. Douyin reviews ad content with AI and human moderation. All influencer scripts should be pre-reviewed for banned terms or imagery.
4. Verify Influencer Business Licenses and Contracts
4.1 KOLs Must Be Properly Registered for Business Activity:
Influencers must possess a valid business license (个体工商户) if accepting commercial deals. Brands should request these credentials to ensure lawful collaborations.
4.2 Written Contracts Are Legally Recommended:
Formalize every influencer partnership with a bilingual contract detailing deliverables, disclosure obligations, IP rights, and penalties for non-compliance. This safeguards both brand image and campaign success.
5. Understand New Guidelines from SAMR and CAC
5.1 March 2023 Guidelines on Online Marketing Conduct:
China’s State Administration for Market Regulation (SAMR) and Cyberspace Administration of China (CAC) introduced joint rules that hold brands accountable for influencer misbehavior—such as illegal product promotion.
5.2 Implications for Overseas Brands:
Even if the brand is not physically based in China, liability applies if Chinese consumers are targeted. Brands must proactively monitor influencer behavior and maintain audit trails.
Case Study: U.S. Beauty Brand Avoids Ban Through Pre-Compliance Audit
A U.S.-based skincare brand planned a KOL launch on Xiaohongshu. Before going live, a local agency flagged two issues: the KOL lacked a business license and the product claim included banned terms like “instant whitening.” The brand replaced the influencer and rewrote the script to align with Chinese laws. The campaign went on to reach 1.2 million impressions with no takedowns or legal red flags.
PLTFRM is an international brand consulting agency that works with companies such as Red, TikTok, Tmall, Baidu, and other well-known Chinese internet e-commerce platforms. We have been working with Chile Cherries for many years, reaching Chinese consumers in depth through different platforms and realizing that Chile Cherries’ exports in China account for 97% of the total exports in Asia. Contact us, and we will help you find the best China e-commerce platform for you. Search PLTFRM for a free consultation!
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