Toymaker Pop Mart Fined $31,411 for False Advertising
The National Enterprise Credit Information Publicity System has fined Chinese toymaker Pop Mart 200,000 yuan ($31,411) for false advertising involving the mystery toy boxes of its SKULLPANDA series stockings.
The sales page of the company’s products showed that they contain 97% cotton and 3% spandex, which is not consistent with investigation results.
Pop Mart said on Thursday that it would refund four times of the original price to customers who have been impacted by the fallout, and will add extra coupons.
The company responded to the issue, saying: “The misleading label is due to the mistake of Tmall flagship store operators, which then led to errors in the description of the products. The problems have been solved and the supervision and management of relevant links will be strengthened in the future.”
Pop Mart was established in 2010 and listed the Hong Kong Stock Exchange on December 11, 2020. The company’s valuation went from 10 million to 100 billion very quickly. As of September 30, 2021, the number of offline direct stores the company has under its jurisdiction is above 250, covering 103 cities in China and 23 overseas countries and regions such as Korea, Japan, the United States and Canada.
However, Pop Mart’s performance after listing has not been satisfactory. On the one hand, designer toys have been a questionable market, and on the other hand, its ability to generate profit has declined, both of which have contributed to a significant reduction in its market value.
According to the company’s recent financial report, in the first half of 2021, the company achieved a total revenue of 1.773 billion yuan and a net profit of 359 million yuan, of which the revenue from e-commerce channels was 353 million yuan.
In fact, this is not the first time that Pop Mart has been punished. In 2017 and 2018, the company was fined for false promotion and product problems respectively. On at least one complaint platform in China, there are 5,860 comments about the company, most of which have received replies from merchants.
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