Genki Forest accidentally loses millions due to price glitch. Now it wants the money back.
China’s most fashionable beverage startup sold mineral water at a deep discount because of a website error. Should customers who bought at low prices feel obligated to return the merchandise?
It was the biggest sale in the history of Genki Forest, a fast-growing, trendy Chinese beverage startup that specializes in sugar-free and low-calorie drinks. On October 26, the company’s store on Taobao, China’s biggest ecommerce platform, drastically slashed the price of its sparkling water, the brand’s most popular product. A package of 36 bottles of the drink, which normally costs 237 yuan ($37.8), was selling for 10.55 yuan ($1.65), a 95% discount.
The amazing deal, however, turned out to be a glitch. The original price was restored immediately after the company realized the mistake. But it was too late. For about 30 minutes while the low price remained online, word spread like wildfire across Chinese social media. Customers were quick to exploit the bug and placed more than 300,000 orders. Almost 500 of them were bulk orders of 10 or more, with the biggest one involving 41,000 boxes of sparkling water.
Now, Genki Forest is making a heartfelt plea for customers to cancel their orders. “We sincerely implore you to request a refund on the platform and help us go through this difficult time. We apologize for the inconvenience and appreciate your understanding and help,” it said in a statement released yesterday. The pricing issue, the company said, was an “operational error” made by an employee, which would result in a financial loss that’s “too high for it to bear.”
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According to financial magazine Blue Whale Media, some shoppers have responded to the call. To further incentivize the voluntary cancellation of orders, Genki Forest forest told the Beijing News (in Chinese) today that it would give everyone 12 bottles of the product as a reward for their kind gesture. “We also decided to shut the Taobao store temporarily and focus on the management of the situation. We will keep communicating with customers who haven’t been able to have their orders processed until this completely blows over,” the company said.
However, on Chinese social media, there was little sympathy for Genki Forest. Most observers argued that the company should honor the incorrect price and just take the loss. “We all know the beverage business is insanely profitable. It probably doesn’t cost a lot to manufacture a bottle of sparkling water. Why is Genki Forest acting like the glitch will ruin its business,” a Weibo user wrote. Others asked the company to stop “morally shaming” customers who took advantage of its mistake. “This news has been trending for a few days and the publicity it generated should have balanced out the financial loss,” another person commented.
Legally speaking, Genki Forest must stand by the wrong price, said Hú Gāng 胡钢, a lawyer with the China Consumers Association. “Once an online purchase is made, the customer automatically enters into a contract with the seller,” Hu said (in Chinese). “It’s illegal for Genki Forest to break the contract and refuse to honor the price glitch.”
Founded in 2015, Genki Forest is a data-driven beverage startup that has achieved tremendous success by tapping into China’s growing health awareness trend, developing a cult following among health-conscious customers who are willing to pay more for purported “goodness.”
In April, the company attracted considerable public criticism after people found that its milk tea beverage, which was advertised as “sugar-free,” actually contained crystalline fructose, a nutritive sweetener that’s considered sugar by broad definition.
