On Wednesday afternoon, emerging beverage brand Genki Forest, saw the retail price of its products sold online for less than what it costs the company to produce the beverages.
The company quickly issued an announcement begging users for a refund. “A large number of ultra-low-price orders caused by the operational error far exceeds our inventory, and the losses far exceeds our affordability,” the announcement stated.
The price of a box of sparkling water in 79 yuan ($12) was reduced to 3.5 yuan due to an incorrect preferential setting within the online Taobao shop of the company. The operational error caused the sales volume of this sparkling water to soar by 300,000 orders, and the store may lose more than 2 million yuan.
Lawyers have different opinions on this matter. Some lawyers said that Taobao stores can cancel orders according to laws and regulations. However, since the mistake is caused by the operator, the store needs to give certain compensation to consumers who place orders normally. As long as both parties reach consensus through consultation, consumers will not be able to force merchants to deliver the goods.
However, some lawyers said that if Genki Forest can’t provide evidence to prove that it is really an operational error, the company cannot unilaterally cancel the order. If Genki Forest doesn’t deliver goods, it will constitute a breach of contract and may even constitute fraud.
Genki Forest has broken through the beverage industry with its nationwide web celebrity beverage brand, reportedly containing 0 sugar, 0 fat and 0 calories. In a round of financing in mid-2020, it was valued at $2 billion. In the first half of this year, in a round of financing led by Sequoia China, its valuation reached $6 billion.
A total of 140,500 users placed orders during the incident, generating orders worth tens of millions of yuan, the company said in a late-night statement. The Taobao store involved has suspended sales, and as compensation, Genki Forest has decided to send boxes containing 15 bottles of white peach sparkling water to each user who placed an order.