Xiaomi Corp. said it removed all advertisements for peer-to-peer (P2P) platforms across its channels after about 400 million yuan worth of deposits, or about $59 million, from Xiaomi users were involved in the recent P2P lending default wave in China.
The Chinese smartphone maker, which is increasingly popular among young Chinese, said the company also pulled most of the financial apps from its app store and no new P2P wealth management apps will be added, according to Tencent News.
The incident came after more than 100 P2P lenders have collapsed so far in July alone on tightening regulation and a liquidity crunch. Thousands of individuals and families who invested in the defaulted P2P lenders found it impossible to withdraw their money.
About 430 Xiaomi users suffer from the burst of the P2P lending bubble, according to Xiaomi, with some of them in the process of gaining back their funds with the help from Xiaomi.
Xiaomi said the company only showed advertisements of the P2P companies for advertising revenue and not as strategic partnerships or for commission. While promising to have stricter standards for all third-party ads on its platforms, it will place more frequent and obvious warnings for users on risks in investing in P2P companies.