Why Chinese tech companies fear the "Wool-Pulling Party"

Pinduoduo hit by a gang known for tormenting tech companies

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Why Chinese tech companies fear the "Wool-Pulling Party"

Published: 9:06pm, 22 Jan 2019Updated: 8:51am, 20 Sep 2019

This article originally appeared on ABACUS

An ecommerce platform in China has just lost around US$1.4 million thanks to a nimble group of users with an unusual name: The Wool-Pulling Party.

Social ecommerce platform Pinduoduo realized it got "fleeced" last Sunday through a loophole which enabled users to get unlimited online coupons worth approximately US$15 each. The company said it fixed the problem and reported the incident.

But Pinduoduo is far from the only online platform that has fallen victim to this group. In fact, these kind of schemes have become widespread in China, where many tech companies compete for users by handing out cash incentives.

The Chinese platform known for fake products now has a clone

The term Wool-Pulling Party refers to users which operate in a legal grey area, taking advantage of these promotions to raid platforms for gift coupons and cash incentives. Sometimes they're as simple as that, users piling on to a too-good-to-be-true deal, while at other times they use far more nefarious means that may be illegal.

The term is said to originate in a popular sketch performed during the 1999 CCTV Chinese New Year Gala show. But the sketch is actually quite grim.

An old village woman (played by popular Chinese sitcom actress Song Dandan) tells how she stole wool from collectively owned sheep during Mao’s era to make her husband’s sweater, and was consequently subjected to a struggle session, a form of public humiliation and torture not uncommon at the time.

“You were undermining the foundations of socialism!” exclaims the host.

“Yes, I was convicted of fleecing socialist wool.” (drum roll)