Companies & Markets

China to tighten regulation of community group buying

Published Tue, Dec 22, 2020 · 03:18 PM

[BEIJING] China's market regulator will increase regulation of community group buying sector, which allows groups of local residents to get discounts by buying together in bulk, urging internet giants not to compete for market share with unreasonably low prices.

China's State Administration for Market Regulation (SAMR) met representatives from Alibaba, Tencent, JD.Com, Meituan, Pinduoduo and Didi Chuxing to discuss oversight of group buying. The SAMR did not provide details on what the regulations could be.

This location-based approach has gained increasing popularity among consumers and typically sees a self-appointed leader who creates a social media account to post product links for neighbours, friends or family to place their orders together for goods, such as groceries, for bulk delivery to one location.

Community group buying quickly spread to many of China's smaller cities, with leading players such as Meituan offering new registered users the chance to buy 1.5 kilogrammes of apples or 30 packs of paper tissue for as little as US$0.0015.

China has vowed to strengthen oversight of its big tech firms, which rank among the world's largest and most valuable, citing concerns that they have built market power that stifles competition, misused consumer data and violated consumer rights.

Last month, Beijing issued draft rules aimed at preventing monopolistic behaviour by Internet companies, marking China's first serious regulatory move against the sector.