Tuesday, April 1, 2025

Chinese Retailer Hits $4.2 Million Loss Do to Employees Mistake—What Happened?

South China Morning Post

A Chinese company recently disclosed that it faced losses exceeding 30 million yuan (US$4.2 million) due to a pricing error made by an employee.

South China Morning Post reported that Little Swan, an electronics retailer, inadvertently listed a washing machine at a dramatically reduced price, leading to over 40,000 orders within 20 minutes. The listing error occurred outside of any planned sales or promotional events.

The washing machines, which typically retail for 1,699 yuan (US$240) and 2,499 yuan, were mistakenly priced online at 299 yuan and 439 yuan, respectively.

Upon discovering the mistake, Little Swan requested customers cancel their orders, but estimates suggest the company’s losses could total around 30 million yuan. The company attributed the error to an employee’s misunderstanding of the discount rules on the shopping platform Tmall.

Little Swan issued a statement expressing regret over a significant error that impacted both the volume of orders and the company financially. The company apologized sincerely to all affected customers and requested their understanding of their difficulties. Further, Little Swan assured that efforts were underway to expedite refunds as quickly as possible.

The employee also posted a plea on social media, admitting, “I realized the mistake 20 minutes later. Even if I sold everything I own, I couldn’t cover the losses.”

Little Swan’s statement noted that many customers appeared to purchase in bulk, suggesting that some may have been businesses intending to resell the items for profit.

Local attorney Zhao Liangshan explained that the company could seek to void the purchase contracts in court due to the pricing error, allowing them to refund customers without delivering the products.

Meanwhile, local market authorities have investigated the cause of the pricing error.

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