China regulator warns e-commerce firms on 'Singles Day' sales tactics

Nov 8 China’s business regulator said
it has warned leading online shopping companies, including
Alibaba Group Holding and, against
adopting dodgy sales tactics at the upcoming “Singles Day”
festival, China’s biggest shopping day of the year.

The stakes are high in the one-day event, held annually on
Nov. 11, which sees billions of dollars of goods sold online at
steep discounts, and is watched as a barometer for the
e-commerce industry and consumer economy in China as a whole.
Alibaba’s transactions alone exceeded $14 billion last year and
are expected to grow this year.

The State Administration for Industry and Commerce (SAIC)
said it met with Alibaba,, Inc, Baidu
Inc, Tencent Holdings and several others on
Monday and warned them against selling fakes, falsifying sales
figures and engaging in other fraudulent practices.

“The SAIC will strengthen market supervision … monitor and
manage online marketplaces according to law, and together with
the majority of industry players jointly create an online market
environment of fair competition and an environment for online
consumption that is safe and secure,” it said in a statement
posted on its website on Tuesday.

Alibaba, Amazon, Baidu and Tencent did not immediately
respond to emailed requests for comment on the SAIC’s warning.

A spokesman said: “Our commitment to quality products
and service has always been a key differentiator for us in this
market and we employ additional resources for major sales to
keep that promise even during the busiest periods.”

Singles Day, launched seven years ago by Alibaba, has
already eclipsed the combined sales of the equivalent events in
the United States: Cyber Monday and Black Friday.

However, cutthroat competition for customers on Singles Day
has led to accusations of underhanded tactics by online commerce
platforms, including false advertising, massaging of statistics
and forcing sellers to choose one platform over others.

While the SAIC has served such a warning in prior years,
there is added focus on the Chinese online shopping companies
this year after Alibaba’s accounting practices for the event
came under the scrutiny of the U.S. Securities and Exchange
Commission. Some merchants have questioned whether results from
the event are really as high as reported.

The SAIC asked the e-commerce firms to guard against fudging
of transaction figures, false advertising and sales of fake or
shoddy products. It also warned them against deploying fake user

The regulator noted various problems that had cropped up in
2016 in e-commerce and said “those operating on the internet
need to face (the issues) squarely, to further standardize
online market order, and optimize the online consumption

(Reporting by John Ruwitch; Editing by Muralikumar

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