China's market regulator summoned five e-commerce giants — including Temu and JD.com — on Thursday over false advertising and other violations, as Beijing intensifies its crackdown on cutthroat online competition.
The Beijing Municipal Administration for Market Regulation said it identified issues such as misleading promotional campaigns, irregular rules, and failure to disclose merchant information. The talks with company representatives came just days before the '6.18' shopping festival, one of China's biggest online sales events.
The watchdog proposed what it called 'rectification requirements' aimed at preventing risks during the festival. Some platforms had launched '10 billion yuan' subsidy campaigns for the event but didn't say how much they actually spent or how long the promotions would last, the regulator said in a statement.
'Some platforms launched 10 billion yuan subsidy campaigns for the shopping event but didn't detail actual subsidy amounts nor the length of the promotion,' the Beijing watchdog said.
The five platforms summoned are Temu, JD.com, Pinduoduo (which shares a parent company with Temu), Douyin (the Chinese version of TikTok), and RedNote (a social commerce app). AFP has reached out to the companies for comment.
The crackdown is part of a broader official effort to tame 'involution' — a popular term in China describing a race to outcompete that ends up going nowhere. In recent months, authorities have targeted excessive competition across online shopping, food delivery, and electric vehicles.
What 'involution' means for shoppers
'Involution' has become a buzzword in China for a phenomenon where companies and workers push themselves harder and harder, but the extra effort produces little real gain. In e-commerce, it's meant platforms slashing prices and offering huge subsidies to grab market share, often at the expense of profits and fair practices.
The regulator's move signals that Beijing is serious about reining in these tactics, especially during major shopping events like '6.18', which was originally a mid-year sale started by JD.com but has since become a nationwide online shopping spree.
The five platforms have been told to fix the issues and ensure compliance during the '6.18' festival. The regulator didn't announce fines or penalties, but it said it would continue to monitor the situation. Companies that fail to meet the rectification requirements could face further action.
For Nigerian consumers who use Temu — which has grown rapidly in Africa, including Nigeria, with its ultra-low prices and flash sales — the crackdown may not have an immediate effect. But it could signal that the platform's aggressive marketing tactics are under closer scrutiny at home, which could eventually affect its operations abroad.
The '6.18' shopping festival is expected to generate billions of dollars in sales this month. Whether the platforms will tone down their ads after the regulator's warning isn't clear yet.