The display of thousands of drones flying in formation over the city was widely covered by global media.
But people who were at the event on Tuesday night have said they saw nothing.
Yihang Bailu, the company behind the display, told the BBC that the footage broadcast around the world was actually from a practice run on December 28.
The manager said it had been arranged by local TV station Shanghai Dragon Television "to ensure the global live broadcasting effect".
It emerged that local authorities had also posted on their official social media accounts on December 30 that there would be "no New Year Eve celebration activity" on The Bund this year.
Footage of the impressive display was released by China's state-run media.
It shows 2,000 drones taking off against the dramatic skyline of Shanghai's Pudong district, then creating firework shapes, an animated running man figures and then spelling out 2020 and Chinese characters in the sky.
Shanghai has held muted New Year events ever since a stampede in 2014 left nearly 40 people dead in crushes, the BBC reported.
Pre-recording highly choreographed drones is not entirely new.
In 2018, it was confirmed that TV viewers of the opening ceremony of the Winter Olympics in South Korea were shown a "secretly pre-recorded" drone display, because of the risk of freezing weather and winds causing disruption on the night.
A dramatic sequence of fireworks crossing Beijing like footsteps during the 2008 Olympics was also faked for TV audiences.
( With inputs from IANS )