Xiaomi under investigation for misleading advertising
Wed 30 Sep 2015
Chinese smartphone maker Xiaomi is under investigation [Chinese] for using superlative messaging on its website to describe its product range, according to a leaked document from the Beijing Ministry of Industry and Commerce.
A new law in China stipulates that adjectives used to promote products must not mislead consumers, with penalties starting at RMB 200,000 (approx. £20,700) for those found to be in violation. The Xiaomi investigation claims that the company used phrases such as ‘the best’ and ‘the most advanced’, in its online campaigns and therefore violated the country’s advertising law.
The law is intended to protect Chinese consumers from superlative advertising – a common practice, particularly among internet companies which frequently use clichéd phrases. The style is so commonplace that customers are accustomed to regarding them as frivolous in meaning.
Xiaomi is the first target of the new legislation which came into effect on the 1st September. A leaked statement read that law-enforcement officials had discovered evidence of exaggerated messaging on Xiaomi’s website following a tip-off from Tan Wensheng, CEO at rival handset company Cong. He wrote on his official Weibo blog [Chinese] of his concern that Xiaomi was using terms such as ‘first-class’ and ‘the kings of screens’ to rope in buyers. Cong released its own smartphone range last year which received little market interest. Wensheng was previously CEO at Red Pepper, which also failed to make an impact and was fined RMB 150,000 (approx. £15,550) for making false accusations about Xiaomi.
Xiaomi and the Beijing Ministry are both yet to comment on the recent allegation.
The dispute could be harmful to the smartphone giant’s corporate image, with reports pointing to the sceptical intent behind the case. Chinese smartphone companies are continuously finding ways to publicly attack Xiaomi, which boasts a significant share of the domestic market, as well as growing popularity in India.