عربي English Türkçe اردو فارسى
Logo
Latest News
Technology

China Proposes Rules to Punish Illegal E-commerce Pricing

China Proposes Rules to Punish Illegal E-commerce Pricing
TT
TT

China Proposes Rules to Punish Illegal E-commerce Pricing

China Proposes Rules to Punish Illegal E-commerce Pricing

China's market regulator issued draft rules on Friday to punish illegal pricing activities, including heavy subsidies and the practice by online platforms of charging different prices based on customers' purchasing behavior.

The rules are the latest in an effort by the State Administration for Market Regulation (SAMR) to rein in China's free-wheeling platform economy, which has seen it levy fines, launch investigations and issue warnings to booming e-commerce giants.

"The pricing practices have been widespread among online platforms and it is a hidden problem to ordinary consumers because it's not very easy to notice," said Lu Zhenwang, chief executive officer of Shanghai-based Wanqing Consultancy.

Consumers over the years have complained on social media that e-commerce platforms don't charge the same price for the same offerings.

Among the practices banned in the rules proposed on Friday are subsidies that cut the price of a product to below cost.

Violation of the rules could incur a fine of 0.1% to 0.5% of a business' annual sales or even suspension of operations, SAMR said.

In an April meeting with the market regulator in the southern metropolis of Guangzhou, platform companies including JD.com, Meituan, Alibaba's food delivery arm Ele.me, Trip.com and Didi Chuxing pledged not to take advantage of big data to charge loyal customers more.

In March, state news agency Xinhua reported that Alibaba's online travel agency Fliggy offered different ticket prices for the same flight, with more loyal users getting a higher price.

In the same article, Xinhua said Meituan charged different prices for the same pet care product.

Alibaba and Meituan did not immediately respond to requests for comment from Reuters on Friday.

In October, the Ministry of Culture and Tourism imposed a rule banning the practice of differentiated pricing by online travel services.

In April, SAMR fined Alibaba a record 18 billion yuan ($2.78 billion) for abuse of its dominant market position and announced an antitrust investigation into Meituan.

Most Viewed

 
 
Technology

Tesla's China Sales Hit Record High in 2024, Bucking Global Decline

FILE - A Model X sports-utility vehicle sits outside a Tesla store in Littleton, Colo., on June 18, 2023. (AP Photo/David Zalubowski, File)
FILE - A Model X sports-utility vehicle sits outside a Tesla store in Littleton, Colo., on June 18, 2023. (AP Photo/David Zalubowski, File)
TT
TT

Tesla's China Sales Hit Record High in 2024, Bucking Global Decline

FILE - A Model X sports-utility vehicle sits outside a Tesla store in Littleton, Colo., on June 18, 2023. (AP Photo/David Zalubowski, File)
FILE - A Model X sports-utility vehicle sits outside a Tesla store in Littleton, Colo., on June 18, 2023. (AP Photo/David Zalubowski, File)

US electric vehicle maker Tesla said on Friday its China sales rose 8.8% to a record high of more than 657,000 cars in 2024, a strong performance in a competitive market in a year when its annual global deliveries fell for the first time.

Tesla's sales in the world's largest auto market also increased 12.8% in December from a month earlier to a record high of 83,000 units, according to Tesla China.

In 2024, Tesla delivered 36.7% of its cars to customers in China, its second-largest market, based on the sales figures.

However, its global deliveries slid 1.1%, missing CEO Elon Musk's earlier prediction of slight growth, with exports from China falling by 24%. Reduced European subsidies, a US shift toward lower-priced hybrid vehicles and tougher global competition, especially from China's BYD , were a drag on sales, Reuters reported.

In December, Tesla's China-made EV sales including exports to Europe and other markets edged down 0.4% from a year earlier to 93,766 units, according to data from the China Passenger Car Association (CPCA) on Friday, pushing Tesla to the first annual decline in deliveries from its Shanghai plant.

Full-year sales of China-made Model 3 and Model Y vehicles, including domestic China sales and exports, slid 3.3%. Exports from China dropped to about 260,000 last year, their worst performance since 2021, according to Reuters calculations based on Tesla and CPCA figures.

The US EV maker's exports to Europe from its most productive factory were overshadowed by a year-long subsidy investigation against China-made EVs launched by the EU's European Commission, which imposed in October a 7.8% tariff on Tesla cars from China.

The carmaker's record China sales while its worldwide deliveries fell is reflective of the global EV landscape as China is the only major market seeing robust growth versus a slowdown or even slide in other markets, said John Zeng, head of market forecast for China at London-based consultancy GlobalData.

China accounted for 70% of global sales of EVs and hybrids in the first 11 months of 2024, and over 90% of an increase in global EV and hybrid sales over last year came from China, industry data showed.

With full-year global sales of 1.79 million cars, Tesla was still narrowly ahead of BYD, whose EV sales grew 12.1% to 1.76 million globally.

The US EV giant downsized its global workforce last year in the face of tepid demand and stiffer competition from Chinese EV makers, and cut the size of its China sales team.

As an EV price war in China enters a third year, Tesla has extended a 10,000 yuan ($1,369.99) discount on outstanding loans for its best-selling Model Y as well as zero-interest financing of up to five years for some Model 3 and Model Y cars until the end of this month.

BYD, which has led a cost-cutting competition with its Dynasty and Ocean series of EVs and plug-in hybrids, overshot its sales target, with passenger vehicle sales up 41% to over 4.25 million units last year.

The Chinese EV champion's overseas shipments rose 71.9% to 417,204 units, or 9.8% of its global sales, missing its export target of 450,000 for 2024, as it faces a 17% additional tariff, the lowest the EU has assigned Chinese EVs from China.

Nearly one out of five BYD cars sold out of China was in Brazil, where BYD and its contractor Jinjiang Group are facing investigations by Brazilian authorities into the conditions of Chinese workers at the construction site of a local BYD factory.