A Weibo-Led Scandal Brews In China’s Luxury Market

(Photo: Netizens have called Ouyang Kun a scam artist and his organization a shell corporation)

(Photo: Under fire: Ouyang Kun)

One of the more interesting scandals to break online in China in recent months is a Sina Weibo-led campaign questioning the legitimacy of an organization called the World Luxury Association (WLA) and its “China representative office” CEO, Ouyang Kun. The WLA, which calls itself “the world’s largest luxury brands research and management international non-profit organization,” regularly releases luxury industry studies and press releases filled with at times questionable data, occasionally re-reported by media outside of China as well. Last year, the association claimed China would become the world’s largest luxury market in 2012, making up 28 percent of the global market, while virtually every other major study projects 2015. While we’ve long been skeptical of the WLA’s study methodology and organizational structure — its official website is, for lack of a better word, useless — Kun of the WLA has spent the last several years appearing on television programs in China as a “luxury expert,” collecting exorbitant appearance and consulting fees. Yet at the same time, the company itself has remained opaque, vaguely saying it operates offices around the world and is a non-profit founded in 2003, “approved by the U.S. government and certified by the U.S. State Department.”

Over the past few months, following the release of its “Top 100″ brand ranking — which some Chinese readers felt was padded with little-known brands, including a virtually unknown Chinese wine maker — the WLA (and, more specifically, its founder Kun) has come under serious scrutiny by Weibo users and netizens. With a little digging, as China Radio International noted this week, it was discovered that the company was first registered not in the US but in Hong Kong, under the name “The World Luxury Association” as a private and local company on Feb. 4, 2006. As Phoenix Online (Chinese) added in a subsequent article, though Ouyang Kun told Chinese media that he first came into contact with the World Luxury Association’s “US office” at some point in 2005 then opened a representative office in Beijing three months later, it was discovered that a company by the name of “World Luxury Association (Beijing) International Business Management Co., Ltd.” was not registered in the US until July 2008. Additionally, nothing found by these investigations indicated that the WLA was a non-profit, with some claiming the organization was essentially a shell corporation designed to enrich Ouyang Kun.

Phoenix Online’s article also pointed out that staff at the World Luxury Association’s Beijing office were led to believe that the organization had more than a dozen chapters around the world, yet had never come into contact with or received any form of communication from any other office. The publication phoned a listed number for the “New York Headquarters” for verification purposes, but the call went straight to voicemail. As Sina wrote earlier this week, each investigation of the WLA turns up more questions than answers — Weibo users have found that Ouyang Kun has used a number of different aliases (Mao Ouyangkun, Kun Mao, Mao Shaokun) and possibly fudged his educational background. As Sina concluded, “No matter what articles internationally say, or what the WLA’s official site says, the scope of the WLA’s activities seem to be limited in China. Every bit of evidence that the association says proves its legitimacy is limited within the territory of China. Therefore, it should just be called the ‘Luxury Association.’”

For his part, rather than seeking to address media allegations or the questions raised by Weibo users one-by-one, the WLA’s Ouyang Kun has instead claimed extortion by his accusers and angrily responded that his organization is coming under scrutiny only due to his ethnicity. As Kun posted on his Weibo, ”All of the questions about the WLA have arisen because I am Chinese…If the founder of the WLA was a foreigner, would you recognize all he does?” To which one user responded, “You’re being questioned because you hoodwinked the Chinese people.”

The Weibo and media back-and-forth continues, with no clear resolution. What is certain, however, is that the reputations of Kun and his organization have been heavily damaged, and Kun’s PR fumbles over the past month have done little to defuse increasingly loud calls for a broader investigation.

Source: Jing Daily