Alibaba-Backed Nice Tuan Fined 1.5 Million Yuan Over Its Market Behaviour

Alibaba-backed Nice Tuan is fined 1.5 million yuan (that is around $235,302) and has been asked to suspend its functions for three days in Jiangsu province by the Chinese regulator. The Chinese market regulator took this step because of Nice Tuan’s irregular pricing checks and product dumping.

In a statement released on the State Administration for Market Regulation (SAMR) website, the Chinese market regulator said that the community group failed to fix malfeasances. The group was also fined in March. The other groups fined by the Chinese regulator include Meituan (HKG: 3690), Pinduoduo (NASDAQ: PDD) & Tencent Holdings (HKG: 0700) due to inappropriate pricing protocol. For instance, Nice Tuan used to offer a pear at 0.99 yuan per 250 grams; however, its cost is 3.89 yuan, according to SAMR.

The Notice

The regulator also mentioned that they received many customer complaints and found Nice Tuan is not completely implementing the rectification obligations. In reply to the notice of SAMR, Nice Tuan, in a statement, said that they pay great attention to the notice, and will sincerely receive punishment, and will swiftly mend business behavior. The Chinese e-grocery platform, Nice Tuan, also known as Shi Hui Tuan, recently raised a funding of $750.

Two months ago, the SAMR also fined community group purchasing platforms that include Meituan, Tencent-backed Shixianghui, and Pinduoduo for inappropriate pricing behavior. The platforms provide cheaper groceries to people who purchase in bulk. Nice Tuan offers beverages, leisure food, & daily supplies. The service offered by these community groups is very popular in lower-tier cities. However, despite recent regulatory scrutiny, competition is intense among them. This business model of community group-buying is iterating and evolving, and with the entry of big firms, the model is witnessing a surge and unparalleled competition. 

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Published by Donna Fago

I believe in writing content Informing investors with the knowledge they need to invest better today- I have been following the markets for many years and was asked to join the team at recently due to my passion for the markets.