Chinese on-demand services app Meituan was blasted last week after a WeChat post accusing the food delivery giant of price discrimination went viral. Yet another top Chinese livestreamer was found to be selling counterfeits. JD.com apologized for an advertisement for its financial services arm featuring a denigrative depiction of a migrant worker.
China’s e-commerce and retail market offers a fire hose of products, choices, business models, rapidly changing content, and more. Here’s what you need to know about China’s online retail market for the week of December. 17 – 23.
Meituan blamed for price discrimination
A WeChat post accusing Meituan of charging its paid members higher delivery fees than its free users went viral last week, renewing netizen attention to the topic of price boosting by Chinese tech companies. A user with the nickname “Piaoyi Shenfu” said in the post that he was shocked to discover that he was charged RMB 4 ($0.6) more for a delivery fee when ordering from a paid account that costs him RMB 6 to RMB 15 per month.
The Weibo thread (in Chinese) titled “Meituan accused of exploiting members” had attracted 720 million views as of Wednesday with many users reporting similar experiences as Piaoyi Shenfu.
The Tencent-backed company denied discriminating against paid users in a Thursday response, claiming that the additional delivery fees were caused by an error in the app’s location cache.
However, netizens remain unconvinced. Piaoyi Shenfu posted a follow-up post Tuesday, saying the company’s false excuse showed its insincerity.
A Weibo user accused Alibaba’s Taobao and online travel giant Ctrip of using similar tactics. Ctrip, which has been accused in the past of price optimization, denied the accusation and asked the netizen to provide evidence of the claim.
In November, Beijing rolled out a draft rule to curb monopolistic practices such as forced exclusivity and price discrimination, where customers are asked to pay different prices for the same product based on data gathered from users. (Piaoyi Shenfu, in Chinese)
Top livestreamers sell knockoffs
Luo Yonghao, an iconic Chinese tech entrepreneur who turned to livestream commerce after the failure of the smartphone company he founded, apologized in a Weibo post on Dec. 15 for selling knockoff sweaters bearing French brand Pierre Cardin labels in a November livestream. Luo’s company said it is establishing a research lab and cooperating with third-party institutions to tighten quality control.
In addition to Luo, several other top livetreamers were found to be endorsing and selling counterfeit products. Kuaishou’s top livestreamer Xin Youzhi, also known as Xin Ba, was slammed for selling fake bird’s nest soup, while “Lipstick King” Li Jiaqi was accused of saying the ordinary hairy crabs he sold were from Yangcheng Lake, the famed area in China for premium grade lake crab. (People.cn, in Chinese)
- JD.com Digits, JD’s financial arm readying its public listing in Shanghai, apologized on Friday for an advertisement featuring a depiction demeaning of migrant workers. The ad, which went viral on social platforms, features a scene where a poorly dressed migrant worker travels with his mother by airplane. Unfamiliar with air travel, the man asks the attendant to open the window for his airsick mother. While the surrounding travelers deride him for the request, the attendant informs him that a seat upgrade would cost him RMB 1,300 (around $200). While the migrant worker cannot afford the sum, a well-dressed businessman suggests that he take an instant loan of RMB 150,000 from JD Digits for emergencies like this to “avoid being looked down upon by rude people.” (Caixin Global)
- Alibaba Group came under scrutiny last week when news broke that clients of its cloud computing business could screen for ethnicity using its facial recognition software, enabling the identification of Uighurs and other ethnic minorities. In response to the news, the company removed the software and said it would not allow its technology to be used for targeting specific ethnic groups. (The New York Times)