The Chinese community group-buying app Nice Tuan, backed by the ecommerce giant Alibaba, was handed a 1.5 million yuan (US$235,000) fine by China’s market regulator for failing to take action over product dumping practices and pricing fraud.
The State Administration for Market Regulation (SAMR) also ordered the platform to suspend its business operations in the Jiangsu province for three days starting Friday, May 28, for “failing to rectify” monopolistic behaviour.
The organization released a statement on Thursday saying that this was the first time the SAMR issued a fine higher than the basic penalty, “demonstrating the determination of the market supervision department to fight the chaos.”
A spokesperson for the organization added that “in late April, we received clues that Nice Tuan did not fully implement the rectification commitments and there are still large numbers of low-price dumping and price fraud incidents in its Jiangsu area.”
Community group-buying platforms offer groceries at a lower price for people who join together to buy in bulk directly from the farmer. The model has become increasingly popular in China, especially in lower-tier cities. However, competition is intense among platforms that are often accused of manipulating prices unfairly.
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