Tencent-backed online discount platform vip.com is being investigated by China's market regulator over alleged unfair market competition.
The State Administration for Market Regulation (SAMR)'s inquiry was based on tip-offs, the state media Xinhua News Agency reported.
Vip.com was founded in 2008, specializing in selling discounted handbags, cosmetics products, and baby products. It was listed in the New York Stock Exchange in 2012. Chinese internet giant Tencent is also an investor in vip.com.
In response, Vip.com said it will cooperate, the state media Global Times said.
The move follows a slew of anti-monopolistic investigations against a number of Chinese internet platforms including Alibaba, Tencent-backed online literature platform China Literature and express locker solutions provider Shenzhen Hive Box Co. In December, the three firms were fined 500,000 yuan (US$76,465) each for breaching the country's Anti-monopoly Law.
China's top financial regulatory authorities also launched a high-profile antitrust probe into Alibaba's financial arm Ant Group, after the group's dual listing in Shanghai and Hong Kong was halted on November 3 amid regulatory changes.
According to a commentary published on one of Xinhua's WeChat accounts, the recent iquiry into various internet firms, ranging from digital giants which have business interests across various sectors to e-commerce platforms whose transaction volumes are relatively small, signals that all players follow the same market rules regardless of their size.
"Issues involving unfair competition have been rising, such as blocking ads online, harnessing big data to take advantage of platform members and cutting employee welfare," said the commentary. It noted that unfair practices, which lead to monopoly, will deprive its rivals of the ability to compete and erode the founding for a healthy market economy.
In 2017, Tencent and JD.com invested an aggregate amount of US$863 million in cash in Vipshop. Tencent and JD.com subscribed for newly issued Class A ordinary shares of Vipshop amounting to US$604 million and US$259 million, respectively.
In the third quarter of 2020, Vipshop reported net income was up by 42.1 percent to 1.2 billion yuan (US$183.3 million) from 875.5 million in the year before. Net margin increased to 5.4 percent from 4.5 percent in the prior year period.-State media/The Standard.-Photo: China Daily
In the third quarter of 2020, Vipshop reported net income was up by 42.1 percent to 1.2 billion yuan (US$183.3 million) from 875.5 million in the year before.
