Xioami has been warned to state future sales adverts clearly after the complaints from dissatisfied UK customers caused an investigation into the Chinese company’s £1 smartphone ‘flash sale’ offer. The warning was given by UK’s advertising watchdog
The regulator said it had received 24 complaints from the public after a promotion organised to mark the company’s debut in the UK in November.
Consumers were unhappy that even if they tried to buy a phone as soon as a countdown clock ended, they were told the product was already out of stock.
The Chinese company has not commented.
Xiaomi is one of China’s biggest consumer technology companies and is ranked the fourth biggest smartphone brand by market share, according to a recent report by IDC.
‘Clearer and more timely’
The ‘flash sales’ involved two models of phone that the company introduced to the UK last month.
Xiaomi is well known for holding short first-come first-served sales as a relatively low-cost way to attract attention and in some cases has offered thousands of units at heavily discounted prices.
But in the case of the British event, it provided a total of just 10 handsets across four events in early November.
This limitation was not mentioned on its main sales page but was instead detailed part-way within a terms and conditions document, which was linked to at the foot of its site.
Further investigation by BBC also showed evidence that the document did not include the quantities available until after the first of the sales had taken place.
After several users cast doubt over whether any phones had indeed been sold for £1, Xiaomi explained that it had put forward those who had clicked closest to the set times into a lottery that determined who was offered the special deal.
After facing complaints on social media, the company said its marketing team had not considered that people might have felt misled by this being described as a ‘flash sale’.
The Advertising Standards Authority(ASA) said it had told the company to clearly state its conditions in the future.
Xiaomi acknowledges that it perhaps used a misleading description for what was effectively a raffle, not a ‘flash sale.’
‘In this instance, we instructed Xiaomi to ensure that in future promotions they make a reasonable estimate of the likely response to a promotion and that they are either capable of meeting the likely response or provide consumers with sufficient information – presented clearly and in a timely fashion – for them to make an informed decision on whether or not to participate,’ said an ASA spokesman.
‘For example, they could state how many items are available and make clear that demand is due to be much higher than that.’
The ASA added, however, that it had decided not to follow this ‘advice notice’ up with a formal investigation.