Shanghai Want Want Fined for False Advertisement 01-29-2023

Recently, Shanghai Municipal Bureau of Market Supervision and Administration announced on its website that Shanghai Want Want Network Technology Co., Ltd. (Shanghai Want Want) was fined RMB 15,300 for releasing false advertisements.

According to the written decision by which the penalty was administrated, the bureau of Market Supervision and Administration in Jingan district of Shanghai filed a complaint and conducted an on-site inspection of the “Want Want Official Flagship Store” operated by Shanghai Want Want on the Pinduoduo platform.

After investigation, the Shanghai Want Want official flagship store published an advertisement for one of its dairy products, and the original advertisement stated: “Want Want High Calcium Pure Milk 190mL x 12 Boxes Wholesale, Nutritious Breakfast Milk, Normal Temperature Milk, High Quality Milk Protein”.

The product page has the words "high calcium, rich in high-quality protein, the content of whey protein per box is 6.84g, and the calcium content per box is as high as 228mg". The nutritional content of the product contains the following words: "Item: Protein, 3.6g per 100mL, nutrient reference value: 6%". According to “Appendix A Food Labeling Nutrient Reference Value (NRV) and Its Application Method" from the "National Food Safety Standard of the People's Republic of China General Rules for Prepackaged Food Nutrition Labeling (GB28050-2011)" , the actual protein nutrient reference value per 100ml of the product listed above is calculated at 5.95%. In contrast, according to the "National Food Safety Standard of the People's Republic of China General Rules for Prepackaged Food Nutrition Labeling (GB28050-2011)", the protein nutritional reference value of a food product must be at least 20% per 100 grams or 10% per 100 mL in order to be labeled as “high” or “rich” in protein.

Shanghai Jing'an District Market Supervision Bureau pointed out that the behavior of Shanghai Want Want violated the relevant provisions of Article 28 of the Advertising Law of the People's Republic of China and constituted an act of publishing false advertisements.

Shanghai Want Want repeat offender of advertising violations

This is not the first time that Shanghai Want Want has been fined for publishing misleading information on marketing. On June 19, 2018, the General Office of the State Administration of Radio and Television issued a notice that the broadcast of illegal advertisements of Shanghai Want Want such as "O Bubble Fruit Milk" must be stopped immediately.

According to the notice, Shanghai Want Want’s "O Bubble Fruit Milk" advertisement targeted an age group of 0-14, and the package of this milk product is pink with a classic cartoon image of Wangzai. However, some of the content in the advertisement contains plots showing the feelings of students' puppy love and boys and girls drinking alcoholic beverages, etc. The advertisement presents immoral values to juveniles, affects the healthy growth of minors, and violates regulations such as the "Advertising Law", "Regulations on the Administration of Radio and Television".

Shanghai Want Want has had trouble in sales growth for a long time, and the company’s revenue declined continuously between 2014 and 2016 . Due to its difficult situation, instead of focusing on large single products as the company’s strategy, Shanghai Want Want focused on the continuous promotion of new products and IP development and marketing. However, this move did not change the company’s decline in performance.

Shanghai Want Want’s performance continues to decline in 2022

From the perspective of performance, the company’s 2021 financial report shows that during this period, the company achieved an operating income of RMB 22 billion, a year-on-year increase of 9.5%. The company also realized a net profit of RMB 4.16 billion, a year-on-year increase of 13.9%, which is the largest increase in revenue in the past three years. However, the interim results for the six month period up to September 30, 2022 show that Shanghai Want Want has once again fallen into a situation of decline in both revenue and net profit. During the reporting period, revenue was RMB 10.833 billion, a year-on-year decrease of 4.83%; net profit was RMB 1.569 billion, a year-on-year decrease of 23.64%. Whether it is the weak performance or the overall business layout, it is not easy for Shanghai Want Want to escape its mid-life crisis.

For more information, please check our Dairy Products China News.

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