Staff Reporters
Jul 2, 2020

Tencent likely duped by sham chili sauce marketers

Police in China have arrested three people who allegedly posed as marketers for 'Lao Gan Ma' brand chili sauce after millions in advertising fees were not paid.

Tencent likely duped by sham chili sauce marketers

Mentioning 'The Godfather' in most places around the world conjures images of underground crime. Now, China's 'Old Godmother', aka 'Lao Gan Ma', a popular brand of chili sauce, has found itself at the center of a high-profile attempted swindle involving the brand and internet giant Tencent. 

According to a Tencent statement sent to the Global Times, Lao Gan Ma had failed to pay overdue advertising fees to Tencent for promoting its chili sauce "for a long time." Eventually, say multiple reports, Tencent sued the brand for unpaid ad fees, ordering a freeze in RMB16.24 million (US$2.3 million) in assets. 

Lao Gan Ma promptly issued a statement saying it never signed the contract nor endorsed any agreement with Tencent. The company then asked police to look into the matter. 

Yesterday, police in Guiyang, where Lao Gan Ma is based, issued a notice and posted it on Weibo explaining that it had arrested two females and one male between the ages of 36 and 40 who allegedly had posed as the chili sauce brand's marketing team and forged its company seal to create a false marketing agreement. Their objective, the police allege, was to obtain online game gift package codes provided as part of Tencent promotional activities, which the imposters could then resell for illegal profit online.  

Business publication Caixin reported that Chinese media believe Tencent's promotion of the sauce maker involved its video game QQ Speed, which "has incorporated customized visual elements of Lao Gan Ma into its interface".

Guiyang police say the case is still being processed and the three individuals have been detained. 

The headquarters of Chinese chili sauce maker Lao Gan Ma in Guiyang, Guizhou Province. (2019 photo by Su Weizhong/VCG via Getty Images)

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