Fake promotions abound at Black Friday campaign

E-commerce platforms like Tiki.vn offer stunning promotions, but customers are often disappointed by real gains and dishonest business practices, photo :e Toan

Black Friday is one of the biggest shopping holidays of the year, taking palace on the day after Thanksgiving Day and the Friday before Cyber Monday in the US, when all e-commerce platforms launch campaigns featuring the “biggest promotions” of the year. In the week leading up to Black Friday, most e-commerce platforms in Vietnam, including Lazada.vn, Tiki.vn, Shopee.vn, Sendo.vn, and Adayroi.com, have announced huge promotions of up to a 91 per cent discount.

However, while these shopping events often declaim themselves the “biggest” or “most attractive” of the year, in fact, discounts are not significantly bigger than usual.

Despite accumulated losses of nearly VND600 billion ($26 million), Tiki.vn, which is invested by Chinese e-commerce company JD.com, Inc. and domestic tech giant VNG Corporation, has still poured a great deal of money into television commercial. Accordingly, between November 23 and 26, 2018 for Black Friday, the prices of numerous goods on Tiki.vn will be discounted by 91 per cent, such as consumer goods for mothers and children, fashion items, and cosmetics, while the prices of some famous cosmetics from Japan and South Korea will be reduced by 60 per cent. A large variety of goods will be sold for VND11,000 ($0.5).

Meanwhile, the promotions of the two conglomerates Vingroup and FPT, via Adayroi.com and Sendo.vn, are more modest, with 50 per cent off for household products and electronics such as laptops, mobile phones, watches, and associated accessories during November 20-23.

Discounts all year round

E-commerce platforms run promotion programmes throughout the year, appealing to customers not only on Vietnamese holidays, but during major international shopping seasons as well.

Only two weeks before Black Friday, e-commerce platforms launched big promotion campaigns for Single Day (November 11). With the support of Chinese e-commerce giant Alibaba, the founder of this event, the “Shopping Festival” of Lazada presented hundreds of vouchers, dropping a lot of hi-tech items to VND0, while other e-commerce platforms such as Tiki, Shopee, and Sendo were offering 90 per cent discounts for a range of items.

However, online shoppers were rather disappointed to find Single Day little different from other events. “They advertised it as the biggest sales event of the year, but that is exactly what they said before the previous events, like April 30 (Liberation Day) or September 2 (National Day). There is nothing special, because the prices on normal days are already affordable. There is a lot of hype, but prices are not much cheaper, it gets very old and vexing after a while,” said customer Thanh Phuong.

This might not come as much of a surprise as according to Nguyen Huong Quynh, managing director of The Nielsen Vietnam, a market research company in the world and in Vietnam, promotions are an absolute must for e-commerce companies – not to get ahead but to keep from falling behind as the abundance of promotions results in very limited customer loyalty.

“Customers prefer online shopping for the promotions. Thereby, e-commerce platforms need to know how to lure in customers. Because they will simply give up online shopping or switch to another platform if there are no promotions,” Quynh added.

Promotions with abnormally high prices

To boost shopping demand during big sales seasons like Black Friday, Christmas, and Single Day, e-commerce firms have been regularly making people think that they bought goods at discount prices. Along with trading in fake goods, Lazada.vn, Southeast Asia’s leading e-commerce platform, has been constantly frowned upon selling items at very high prices. 

For example, a box of chocolate chip cookies made in South Korea was discounted by 30 per cent to VND94,990 ($4.1) from VND136,000 ($5.9) on Lazada.vn in the Flash Sale campaign for Single Day. However, these cookies are sold for about VND70,000 ($3) in groceries, and are discounted to VND72,000 ($3.1) from VND84,000 ($3.6) in convenience stores. This means that the discounted goods on Lazada are still more expensive than in groceries or supermarkets.

Recently, a customer noticed that Tiki.vn advertised Hue Royal Tea with a 12 per cent discount at VND79,000 ($3.4). However, the normal price of this item was VND68,000 ($3) before.

Fake promotions are nothing new, however, they have been part and parcel of e-commerce operators’ arsenal for long years now. During Black Friday two years ago, Lazada.vn advertised iPhone 7 for VND15.2 million ($660) at a 42 per cent discount. However, some experienced consumers stated that this price was higher than the market price at the time and the discount was referring to the introductory price of iPhone 7, which was VND25.99 million ($1,130).

When contacted with regards to these issues, Vu Quoc Tuan, representative of Lazada.vn, told VIR, “Lazada is just an e-commerce platform connecting vendors and customers. We do not control or interfere in the selling prices or the introduction of items. It is totally up to the vendors, just as buying is entirely up to customers. Lazada does not take any responsibility for fraud committed by other parties.”

This stance partly explains why Recess Co., Ltd., the owner of Lazada, received the largest number of complaints among e-commerce platforms last year, according to the Vietnam Competition Authority.

While it is questionable whether e-commerce platforms can truly refuse responsibility, customers are advised to be more circumspect when approaching deals and reach out for more information before making a purchase.

Fines for violators

Decree No.81/2018/ND-CP permits 100 per cent discount in specific circumstances, particularly during sales promotions organised by central or provincial authorities and during public holidays, such as the Lunar New Year and all national holidays. Besides, the decree allows 100 per cent discounts of the sale value during the 30 days leading up to the Lunar New Year.

There may be other sales events centrally organised by the government where the 100 per cent discount is allowed, but it remains to be seen how the Ministry of Industry and Trade will schedule and organise such events.

Nguyen Thanh Ha, chairman of SB Law, told VIR, “Based on Decree 81, we can conclude that Black Friday, Halloween or Cyber Monday are not among the promotional programmes with specific durations such as happy hours, big sale days, monthly or seasonal sales or special trade promotion programmes that require the prime minister’s approval.”

According to Ha, in case e-commerce platforms issue promotions that do not match the regulations of Decree 81, they will have to pay between VND20-30 million ($869.5-1,304) in fines. In case the promotions in questions are available in more than one central city and province, the fines will be between VND40-60 million ($1,739-2,608).

Toh See Kiat, chairman of Singapore-based Goodwins Law Corporation, told VIR that if there is a need to quickly stop this rising offence then the penalty should be at least confiscation of all the offender’s profits.

“First offenders should be sentenced to two weeks of jail and/or a fine of 5 per cent of the value they earn from the tricks, while repeated offences should draw increasing penalties,” Kiat said. “It would help if the law allowed the government to block retail websites by executive orders to the internet service providers ISPs.”

The best way to stop such violations is to ensure that e-commerce platforms verify the identity of their sellers, have a rating system to highlight the best sellers and issue demerits or remove those with a bad track record, as well as educate consumers on using these platforms.