The Chinese e-commerce company, Alibaba, has been slapped with an 800,000 yuan ($129,000) fine by the price bureau in Zhejiang province for violations by third-party sellers in promotions on its e-commerce websites.
Alibaba fined for pricing violations
Alibaba turned “Singles’ Day”, a November 11 Chinese equivalent of Valentine’s Day, into an online shopping event i 2009, and since then it’s grown in size similar to Cyber Monday and Black Friday in the US. Last year generated more than $9 billion in sales, and the company has since copyrighted “Double 11” in reference to the date 11/11 which refers to the status of single people.
“The company has been fined 500,000 yuan ($81,000) for matters related to Singles’ Day pricing by third-party sellers on our Tmall marketplace in 2013 and 2014 and 300,000 yuan($48,000) for pricing in other promotions in 2013 and 2015,” Alibaba Group said in a statement last week.
Pricing is handled by third parties and not directly by Alibaba, the group stated, but it would in any case enforce price rules and regulations with sellers in order to protect consumers.
The 27,000 vendors that featured on Alibaba’s Singles’ Day sites hoe to boost sales and increase customers, but many have complained that discounts and rivalry undercut the benefits.
Alibaba does have difficulties from time to time regulating its e-commerce empire, that now includes Taobo, Tmall, Juhuasuan and the original service at Alibaba.com.
In 2011, Alibaba.com suffered a scandal when staff joined with professional criminals to defraud foreign customers, which led to many arrests and the resignation of CEO David Wei. The company was publicly reprimanded by regulators by failing to control the sale of fake goods on its sites, sentiments echoed by groups in the US where the company is listed.
And in February, Alibaba said the US Securities and Exchange Commission sought more information about talks between its executives and China’s State Administration for Industry and Commerce regarding sales of fake products, which the company failed to mention in its IPO prospectus before it listed.
Alibaba’s shares have lost more than 20% this year, with many analysts stating concerns about fake goods and poor third quarter earnings after last year’s $25 billion IPO.
Larry Banks is a keen follower of technology and finance. He has worked for a variety of online publications, writing about a diverse range of topics including mobile networks, patents, and Internet video delivery technologies.