Xiaomi gets fined for false advertising on number of units sold in Taiwan

It hasn’t been a good week for Xiaomi. After allegations of ripping off Apple and rumours of Redmi Note privacy breach, the fast selling smart phone maker has been slapped with a fine by Taiwanese authorities for false advertising.

Xiaomi thrives from its flash sales where its products are being snapped up in just a matter of seconds. The authorities in Taiwan had conducted an investigation and found that Xiaomi wasn’t fully truthful on the number of phones sold as claimed.

Xiaomi had declared its first 2 sales had sold 10,000 units while its 3rd sale had sold out 8,000 units in the month of December. From their investigation, they found out that they only sold 9,339 units, 9,492 units and 7,389 units in each sale respectively. For the 3 consecutive sales, Xiaomi had reported to have allocated 1,750 F-codes to its Fans where they can purchase a smart phone without needing to queue. With those figures included, the disparity is only 30 units from the total amount advertised. Nevertheless, they have been fined with NTD 600,000 which is about RM64,000.

When it comes to its flash sales, the term “Sold” is quite subjective and it is obvious that nobody could order and pay for a product in just a couple of seconds. During our recent experience with their online sales, your order is more or less secured when you add to cart and have checked out to the delivery details page. At that point, Xiaomi would have presumed that you would complete your order but there would be instances where people would place an order but didn’t complete their payment.

Any orders that are not paid will be removed from the system after 12 hours which opens up a possibility of units not being sold. Perhaps Xiaomi should consider using a different term to measure its instant take up rate.

[ SOURCE 2 ]