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KEY STAT | Food delivery platform Ele.me fined for misleading pricing

Written by Julianna Wu Published on     1 min read

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The practice of overstating promotions has long been a common way to attract attention to delivery platforms.

Alibaba’s on-demand delivery platform Ele.me was fined RMB 500,000 (USD 77,000) for “using false or misleading pricing methods to trick consumers or other business operators into trading with them” as well as allowing unqualified operators to engage in food delivery activities on its platform, according to the database Qichacha. The fine was made public on May 13.

“Specifically, Ele.me failed to offer the same amount of discounts as it promised on an ad displayed on its app’s home page,” Jet Deng, a senior partner of Dentons China, told KrASIA.

This practice of overstating promotions has long been a common way to attract attention to delivery platforms, a fast-food chain brand manager told Beijing Business Daily, and this method can effectively increase traffic and order volume.

The latest fine is not directly related to the antitrust campaign under which many internet businesses were punished for misconduct like price discrimination, and the “select one out of two” practice, said Deng, but with the rapid development of the platform economy, monopolistic behaviors can take more complicated forms.

Ele.me is the second-largest on-demand delivery platform in China after Meituan, which holds over half of the market. In March, regulators fined Meituan’s community group-buying subsidiary RMB 1.5 million (USD 230,000) for selling groceries below cost and for misleading consumers with non-existing discounts.

This article is part of KrASIA’s “Key Stat” series, where KrASIA picks and presents the most significant figures of the day’s technology and business world.

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