Due to a Pricing Error, an Appliance Store Loses PHP236M in 20 Minutes
LITTLE SWAN DONGSHAN FRANCHISE SHOP – A Chinese appliance store lost PHP236,184,900 in just 20 minutes due to a pricing mistake. The error involved listing washing machines at much lower prices—one model that usually costs over PHP13,000 was accidentally priced at just over PHP2,000. This huge discount led to around 40,000 orders on August 28, 2024.
Located in Jixi County, Anhui, the store is known for its affordable, locally-made appliances. On September 8, 2024, Little Swan apologized for the mistake and asked customers to cancel their orders. The company admitted that an employee made the error because they misunderstood the promotional rules of Tmall, a platform run by Alibaba Group.
In their apology, Little Swan recognized the confusion and problems caused by the error, expressing deep regret. They promised to refund affected customers and asked for understanding. A customer named Wang, who bought three units after finding the low prices on social media, canceled his orders after the apology.
Little Swan, which has only six employees, has been struggling with low earnings due to the pandemic and economic slowdown. Along with the apology, the store released a video of the employee responsible for the mistake, who expressed regret.
Local market authorities in China are looking into the error. Lawyer Zhao Liangshan said that if the mistake was intentional to gain publicity, Little Swan would need to fulfill the orders. However, if it was a genuine mistake, the store could ask the court to cancel the contracts and refund customers without delivering the products.
Most orders were made by bulk buyers, likely resellers, with only a few customers like Wang canceling after the apology. If the investigation does not go in favor of Little Swan, the store could face large financial losses. The original price of the sold washing machines was PHP554 million, but due to the error, the actual sales were only over PHP316 million. The store hopes the court will see the error as an honest mistake.