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Chinese Company To Lose Rs 35 Crore After Washing Machine Pricing Error

The incident happened on the evening of August 28, when Little Swan's online shop received over 40,000 orders in just 20 minutes, after customers noticed exceptionally low prices on washing machines.

Chinese Company To Lose Rs 35 Crore After Washing Machine Pricing Error
The company has apologised for the mistake and is requesting customers to cancel their orders.

A Chinese small business, Little Swan Dongshan Franchise Shop, is facing a potential loss of 30 million yuan (approximately Rs 35 crore) due to a pricing error. According to the South China Morning Post, an employee mistakenly labelled some washing machines with incorrect prices, sparking a surge in sales. The company, which operates both online and offline in Jixi county, Anhui province, has apologised for the mistake and is requesting customers to cancel their orders.

The incident happened on the evening of August 28, when Little Swan's online shop received over 40,000 orders in just 20 minutes, after customers noticed exceptionally low prices on washing machines. The company, a well-known domestic brand, attributed the chaos to a single employee's mistake. The error resulted in a massive surge in orders, putting the company at risk of a significant financial loss.

If the shop had fulfilled the orders, it would have lost 30 million yuan, as the total value of the products was 70 million yuan, but customers only paid 40 million yuan. A customer, surnamed Wang, said she discovered the drastically reduced prices on social media on August 28 and purchased three washing machines online. She bought two machines normally priced at 1,699 yuan (US$240) each for just 299 yuan, and a third machine normally priced at 2,499 yuan for 439 yuan. After seeing the store's apology and request to cancel orders, Ms Wang promptly cancelled her purchases.

The company acknowledged that, ''Due to the misunderstanding, we made a significant mistake. We recognise that this issue has caused confusion among the public and has seriously disrupted the market. We feel deeply guilty and upset.''

The Little Swan Dongshan Franchise Shop, a small business with only six employees, has struggled to make a profit in recent years due to the economic downturn. Following the incident, the company issued a public apology and requested customers to cancel their orders.

''Tens of thousands of orders and tens of millions of yuan are astronomical figures for us. We feel sincerely sorry for all the affected customers. We humbly beg you to understand our difficulties and to agree to withdraw orders. We will refund you as fast as we can,'' said a statement from the company.

The local market supervision authority has launched an investigation into the incident. According to Zhao Liangshan, a lawyer from Shaanxi Hengda Law Firm, if the company intentionally mispriced the products to attract attention or boost sales, they are legally required to fulfill the orders. However, if the incorrect pricing was genuinely an error, the company can petition the court to cancel the purchase contracts, allowing them to refund customers without having to deliver the goods. 

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