Rahul Sachitanand
Mar 12, 2020

Lazada, Shopee called out for inflated pricing on masks, other COVID-19 gear

Vietnam, Thailand among countries to sanction platforms, even as other countries delist dodgy products and urge rational pricing.

Lazada, Shopee called out for inflated pricing on masks, other COVID-19 gear

As COVID-19 was declared a pandemic by health watchdog World Health Organisation (WHO) on Wednesday, regulators across Asia have sought to stamp out attempts to profiteer from inflated prices of safety gear such as masks sold on online platforms. Across the region, government agencies and regulators have filed complaints and imposed fines against a number of platforms including Lazada and Shopee. 

For example, in Thailand, the country's Ministry of Commerce filed a complaint against Lazada, the Alibaba-funded online commerce unit, after it says investigations uncovered surgical masks being sold at excessively high prices. The country in January classified hand sanitiser and masks as controlled goods, setting a price ceiling of 2.5 bhat (US$0.08) per piece on masks, for example. Three online stores on Lazada were found to be selling masks for 10 times this rate.  

However, Lazada in Thailand, is not the only one in the crosshairs of watchful regulators.

In Vietnam, Sendo, Shopee, Tiki, chotot, vatgia and fado.were all pulled up by the Department of E-commerce and Digital Economy under the Ministry of Industry and Trade (MoIT). However, it was sellers on these platforms, rather than the companies themselves that were fined.

These platforms have been working working closely with the Ministry's E-Commerce department to identify sellers that are manipulating prices of facemasks and hand sanitisers. Since collaborating together, Shopee.vn has treated and removed nearly 3,700 stores and about 4,800 masks and hand sanitisers listed on the platform.

According to media reports, the Vietnamese regulator found widespread evidence of price-gouging on these platforms, leading to the fines. Over 400 sellers had increased rates for 4,000 medical masks and 100 had hiked prices for sanitzers on Sendo. Meanwhile, on Shopee, 3,000 sellers were found to be overcharging consumers; one of them offered a box of masks for 2.7 million Vietnamese dong (US$116), while the normal price was just 250,000 dong (US$10.77).

In China, regulators have spent a lot of time watching the prices of these products online and offline and have been quick to penalise online sales at inflated prices. Sub-standard products have also been tossed as the Chinese government has come down hard on both profiteering and quality.  

Regulators and companies in other countries such as Singapore and India too have tightened their scrutiny of their platforms, threatening to evict sellers for unduly hiking prices in one case. In another case, Qoo10 ejected one supplier with questionable credentials. The Ministry of Trade and Industry has also demanded explanations from Lazada, Carousell and Qoo10 for high prices, according to media reports.   

A screenshot from a March 6 Flipkart blog post

In India, meanwhile, online platforms including Amazon, Flipkart, Grofers and Big Basket are all keeping close tabs on their sellers. "We are disappointed that some sellers are attempting to artificially raise prices on basic need products during a global health crisis. In line with our policy, we continue to actively monitor our marketplace and take necessary action (including removing offers) against sellers who are selling such products above the MRP, which is in violation of Indian laws," Amazon India said in a statement. Flipkart too said it is pushing sellers to curb prices. The federal government is yet to issue any edicts, even if a regulator has asked companies—offline and online—to keep a close watch on prices.

Editor's note: This article was updated to clarify that sellers not platforms are facing fines and to note how some platforms are working with authorities on the issue of over-pricing of these products.

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