Alibaba-backed group buying platform Nice Tuan fined 1.5 million yuan for failing to take action over its market behaviour
- The latest action comes two months after SAMR fined five community group buying platforms, including Nice Tuan, for improper pricing behaviour
- Community group buying, which offers cheaper groceries for people who join together to purchase in bulk, are popular in lower-tier cities
Alibaba Group Holding-backed community group buying platform Nice Tuan was fined 1.5 million yuan (US$235,000) by China’s market regulator for failing to take action over product dumping practices and pricing fraud.
The State Administration for Market Regulation (SAMR) ordered the platform to suspend business operations in Jiangsu province for three days starting Friday for “failing to correct” monopolistic behaviour, although the company claimed it has taken steps to rectify such behaviour.
“In late April, we received clues and found that Nice Tuan did not fully implement the rectification commitments,” the regulator said in a statement on Thursday.
The action comes two months after the SAMR fined five community group buying platforms, including Nice Tuan, Meituan, Pinduoduo, and Tencent-backed Shixianghui, for improper pricing behaviour.
Community group buying platforms offer cheaper groceries for people who join together to buy in bulk, and the service has become popular in lower-tier cities. However, competition is intense despite recent regulatory scrutiny.
In rural China, group buying is the latest grocery shopping trend
“We have received the SAMR notice” Nice Tuan said in a statement. “The company pays great attention to this and will sincerely accept punishment and quickly rectify business behaviour.”
In its statement, SAMR added, “We solemnly remind other related companies that innovation is endless, but business has red lines.”
Alibaba is the parent company of the South China Morning Post.
