Chinese hair salon chain investigated for cult-like worship of founder and dodgy sales practices

Employee’s flattery of business founder goes viral and triggers government probe

Authorities found the business has engaged in deceptive advertising practices and the company has issued an apology

South China Morning Post/December 13, 2021

By Mandy Zuo

A famous Chinese hair salon chain has apologised amid allegations of a cult-like culture and dodgy sales practices after an article by a staff member likening the company’s founder to God was published online.

Shanghai-based Wenfeng, which has hundreds of stores in major cities throughout mainland China, is under government investigation for illicit business promotions after an article by the secretary to the founder, Chen Hao, raised eyebrows last week with its description of Chen as having “heaven’s eyes” and as the “master of the rules of everything”.

The company, which targets elderly consumers, provides mainly beauty services and traditional health products on the side, was found to have sold illegal prepaid cards priced at up to hundreds of thousands of yuan by using deceptive advertising after Shanghai authorities launched a probe into it last month.

In a statement issued on Sunday, the firm said it accepted all the findings and promised to rectify its practices and build a “scientific and modern” staff training system as well as a corporate culture in line with “socialist core values”.

The firm came under fire after the above-mentioned article published on its WeChat account was widely shared early last week online, with many stunned by its over-the-top and worshipful tone.
The article, titled Chen Hao, President of Shanghai Wenfeng Cosmetology Group, in the Eyes of his Secretary, read: “Brother Hao has heaven’s eyes, and his thoughts are the only direction to our success.” Chen, who was born in 1961 and founded the company in 1996, was also dubbed as the “top talent in all trades” with knowledge of everything, among other lavish praise heaped on the founder in the article.

The article was soon deleted, and both the company website carrying the article and the associated WeChat account closed a few days later as web users discovered similar articles about Chen online. He was reportedly treated as a divine leader with flowers and red carpets rolled out when visiting stores and required staff to sing songs like Ten Odes to Brother Hao.

Criticism went beyond the company’s culture as some customers complained they were persuaded to buy long-term prepaid cards but were later refused to refunds when they tried to return them.

The Shanghai Consumer Council, the city’s consumer rights authority, said it is investigating the company after calling in Wenfeng twice since June because of the large number of consumer complaints it has received.

More than 470 complaints mainly about its pricing and promotion practices, have been filed with the council since the start of the year, an increase of 45 per cent from last year, the council said on its WeChat account.

Wenfeng said in Sunday’s statement that it would relaunch its website and social media accounts after a thorough “rectification” and approval by the government. It also vowed to discontinue the prepaid card scheme, which is widely used in China’s hairdressing industry despite being banned by authorities. All its stores across the country are operating business as usual, it said.

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