A Chinese market regulator has ordered seven e-commerce platforms to pay a combined fine of around 3.6bn yuan ($527.3m) for breaches linked to food delivery safety, reported Global Times.
According to the report, the State Administration for Market Regulation (SAMR) imposed penalties on platforms that include ByteDance-owned Douyin, Ele.me, Meituan, Tmall.com and Alibaba’s Taobao Shangou.
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The fines relate to “ghost delivery” — food delivery services provided by businesses that falsify credentials or operate without the required food licences.
The SAMR said the platforms failed to adequately verify merchants’ licences and professional qualifications before allowing them to operate on their platforms.
The regulator also ordered the companies to rectify their “illegal practices” and instructed them to suspend new cake shop listings for between three and nine months.
The legal representatives and food safety directors of the seven platforms will separately pay a total fine of 19.69m yuan.
In a public statement, Pinduoduo said it “sincerely accepts and will resolutely comply” with the ruling.
The company was quoted by Reuters as saying: “We will take this as a lesson, further standardise our business processes, and make optimisations and improvements.”
China’s on-demand food and grocery sector has grown increasingly fierce over the past year.
Leading platforms such as Alibaba and JD.com have been chasing additional customers through coupons and discounts on items such as ice cream and takeaway coffee, according to the Reuters report.
Competition around “instant retail”, where goods are dispatched and delivered in about an hour, has intensified price pressure and weighed on profitability.
The rapid expansion of this model has also attracted closer regulatory attention.
Last month, the SAMR tightened oversight of online food delivery to boost transparency.
