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Tencent’s lawsuit against Laoganma — millions of unpaid advertising fees.

On June 29, Tencent sued Laoganma, China’s most popular hot sauce. According to the lawsuit Laoganma spent 16 million RMB on Tencent’s advertisement but failed to pay the advertising fees.

Naturally this became headline news as people across China began to wonder how Laoganma, a household name that has long claimed to be swimming in cash and never needing to advertise found itself defaulting on 16,000,000 CNY. Laoganma’s response was straightforward — we never advertise and does not owe Tencent any money.

At present it appears that three individuals forged official company seals and signed a fraudulent contract with Tencent, Tencent internal controls failed to notice anything wrong until it was too late, and Laoganma received a huge marketing boost at no cost.

Why would anyone besides Laoganma want Tencent to promote the spicy seasoning? It turns out that the suspects were eyeing the free gifts that came with Tencent’s marketing campaign — digital codes that can be redeemed for virtual items in online games. Officers said the accused impersonators were hoping to re-sell these codes for profit.

Tencent has since withdrawn the lawsuit and even mocked itself on Chinese social networks.

We are proud to say that we at GroupMAV were not adversely affected by the 16 million RMB marketing campaign and still insist the best hot sauce in China is the Daying Chili Sauce from Jiangxi.

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