CAN YOU BELIEVE THIS YOUNG CHINESE INFLUENCER ‘LITTLE FAIRY’ WITH 7.7 MILLION FANS PAYS US$13 MILLION IN TAXES?

Hefty tax bill highlights how lucrative influencer industry has become
Influencer's tax transparency comes amid celebrity tax evasion crackdown in China

A young influencer in China with 7.7 million followers on Douyin paid nearly 100 million yuan (US$13 million) in taxes last year, driving home how potentially lucrative the career can become.

Pan Yurun, 28, hails from the city of Hangzhou in eastern China's Zhejiang province and shares skincare and makeup tips on Douyin. Her nickname is "Little Fairy," and she has built a following thanks to her eloquence, sweet appearance, and cheerful personality.

On March 14, she disclosed in a video that she paid 95 million yuan in taxes in 2023 and displayed a screenshot of her tax payment as proof.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

"Tax payment is everyone's obligation, and I always pay the full amount without engaging in any so-called 'reasonable tax avoidance'," said Pan.

On the assumption that Pan paid the highest possible personal income tax rate at 45 per cent, her annual income in 2023 could have exceeded 200 million yuan (US$28 million).

Even if that number is incorrect, Pan's success was highlighted during a skincare product live-stream in October 2023 when she achieved a daily sales revenue of 110 million yuan (US$15 million).

Her transparent attitude towards paying her full taxes may also result from a recent crackdown on celebrities who did not pay up, which often leads to hefty fines.

In December 2021, China's "live-streaming queen" Huang Wei - also known as Viya - who has 90 million fans on Taobao, was fined 1.34 billion yuan (US$210 million) for tax evasion, and her account was banned on all platforms.

Taobao is owned by Alibaba which also owns the South China Morning Post.

Over the past nine years, Pan's video content has evolved from sharing weight loss tips to selling clothes and offering beauty tips.

Now, she sells skincare products through her live-streams on Douyin, where fans can buy the products directly through the app.

Her work also includes inspirational entrepreneurial stories and financial management strategies.

In 2019, Forbes magazine listed Pan as one of the top 50 Key Opinion Leaders, or KOLs, in China.

"Live-streaming is my entire life," said Pan, adding: "I cherish every one of my fans and do my best to help them buy the most affordable products."

One fan who has followed Pan for nine years explained why the influencer is so popular.

"'Little Fairy' is a girl who knows what she wants and is very brave in pursuing it, and that's why I trust her and her products," the fan said.

There are more than 150 million live-streamers in China according to a report on the mainland's live-streaming and short video industry.

However, more than 95 per cent of them earn less than 5,000 yuan (US$700) a month, falling below China's individual income tax threshold.