It looks like XiaoMi has gotten itself into a rough patch. First, it was allegations of being an Apple copy-cat. Next, it was rumors that the Redmi Note had a privacy breach. Now, it is looking at a big fat fine in Taiwan!
The company is known for its fast sell outs for their devices and advertising the time and units sold on a certain date. The Taiwanese Fair Trade Commission (FTC) has fined the Chinese smartphone company a total of NTD600,000 (around USD$20,000 or RM 62, 000) for false advertising over the number of units that were sold in some of its flash sales. Evidence found has led to allegations that in three of its flash sales in December last year, Xiaomi had sold less units than it claimed to have in stock.
The flash sales were all regarding the famous Redmi smartphone. Usually, Xiaomi’s products sell out within minutes or seconds with a handful of units that don’t meet market demand. However, the FTC believes that in three of the flash sales, the company sold between 508 to 661 Redmi phones less than claimed, totalling 1780 devices less than boasted in advertisements.
It was also discovered that a total of 1750 devices that were not sold in the flash sale were actually reserved and sold to those who had F-codes, which Xiaomi gives away as prizes in contests as well as in its MIUI forums. That leaves 30 units left unsold. Even though it is a really tiny amount, it is still an offence in the FTC’s eyes.
Once this matter became public news, the company immediately issued a public apology. The poster as seen above offers a sorry and a breakdown of the units that were sold. Maybe this was just an innocent mistake by the company, hopefully it doesn’t repeat itself.