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Thursday, 31 July 2014

Xiaomi Fined for Selling Less Units than Advertised in Taiwan Flash Sales

The Taiwanese Fair Trade Commission (FTC) has fined Chinese smartphone company Xiaomi a total of NTD600,000 (around $20,000) for false advertising over the number of units that were sold in some of its flash sales that went on in Taiwan. The authority found that in three of its flash sales in December last year, Xiaomi had sold less units than it claimed to have in stock.

Outside of its home market, Xiaomi employs a flash sales model for its products, where a set number of products are offered at a specific date. The amount of products are usually in the thousands, but more often than not they are not enough to satisfy market demand. As a result, these products always sell out within minutes, sometimes seconds, after they are put on sale.

The Taiwanese authorities found that in three separate flash sales held in Taiwan last December, where the company sold a set number of the popular Redmi smartphone, the total units sold were lower than the amount Xiaomi had claimed. The commission’s investigations revealed that in each of the three flash sales, Xiaomi sold anywhere between 508 to 661 Redmi phones less than the company claimed, totalling 1780 devices less than advertised.

The FTC also found that a huge chunk of the devices – 1750 in total – that were not sold in the flash sale were actually reserved and sold to those who had F-codes, which Xiaomi gives away as prizes in contests as well as in its MIUI forums. That still leaves a grand total of 30 Redmi phones which were not sold, which remains an offense for the Fair Trade Commission.

Shortly after the FTC’s announcement, the company posted an apology poster on its official Weibo account. In true Xiaomi fashion, the poster itself had a cheeky overtone, showing a child facepalming himself, with an apology with a breakdown of the units sold in the three flash sales.

Re-post from : lowyat.net

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