China Consumer

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Xiaomi wins lawsuit over hostile customer review

Lei-Jun-w

Lei Jun: Xiaomi’s iconic founder

The customer is always right” is a longstanding motto said to have been popularised by Harry Gordon Selfridge, who founded the upscale department store on London’s Oxford Street over a century ago. Of course, the concept has plenty of detractors, including Frank Farrington, who wrote a book about sales techniques not long after Selfridges had opened. “If we adopt the policy of admitting whatever claims the customer makes to be proper, we shall be subjected to inevitable losses,” he warned.

Consumer electronics giant Xiaomi seems to adopt a similar position – to the point of suing a customer who aired his complaints about a new smartphone made by the Beijing-based company.

The incident dates back to last August, when Xiaomi launched its high-end handset the Mi 10 Ultra as part of celebrations of the company’s 10th anniversary. Six days after the phone was released, a customer surnamed Zhang, who claimed to have purchased both the standard and gaming versions of the handset, gave it a scathing review on JD.com’s website. “The phone has crashed seven or eight times since I started using it a week ago,” he complained. “At one point it was scorching hot in my hand and its temperature probably hit above 50°C. While it can be recharged speedily, it consumes power very quickly too. The battery is usually dead in two hours.”

In another post, he fumed: “After using it for a week, I’ve found that it has a severe heat issue. Its screen freezes all the time too. It couldn’t seem to be able to take a clear shot [with its camera], needs a long time to recharge and is not waterproof.”

According to National Business Daily, Zhang’s reviews garnered 229 “likes” and triggered 1,274 comments. Screenshots of some of them were reposted by popular bloggers too, which fed another cascade of negative remarks.

Xiaomi took the case to a court in Nanjing in March, accusing Zhang of spreading malicious disinformation that resulted in reputational damage to the company.

A key part of Xiaomi’s evidence was that ‘black fans’ like Zhang are malicious in their reviews. In his case, Xiaomi’s lawyer was able to show that Zhang had received the goods on August 17, the same day he put up his posts. Thus his claims that he’d used the phones for a week were deliberately false, the tech giant argued.

Xiaomi’s legal team demanded that Zhang delete his comments, publish an apology on the JD.com platform for 30 consecutive days, and pay Rmb1 million ($154,671) in compensation.

Zhang countered that he had a right to comment as a consumer and that the posting of his views was not an infringement on Xiaomi’s reputation. But in late June the court ruled that Zhang had violated Xiaomi’s reputational rights. During the litigation process he was also found to have unpacked just one of the phones he had purchased and sold the other on the day he received it. Within days he had sold the remaining phone at the original price too. The court described this as “unusual consumption behaviour” and required that Zhang pay Xiaomi Rmb30,000 in compensation and issue an apology via Legal Daily, a newspaper.

On weibo a hashtag about Xiaomi’s victory has attracted 74 million views. While many agree that smearing a product is unethical, others worry that the case sets a poor precedent, allowing big brands to go after disgruntled customers who speak out online.

On the flip side, there are netizens who believe that artificially positive reviews should be even more heavily punished. “There is a high prevalence of shuaping [which translates as ‘brushing ratings’], which affects consumer behaviour too. Why is it not penalised?” asked one, referring to the phenomenon where brands hire people to post glowing reviews (see WiC426 for more about the phenomenon and the “click farms” that drive it).

That said, some local governments have been trying to crackdown in this area, including the authorities in Hangzhou, which have been working with the restaurant and food delivery app Meituan to target agencies that arrange free meals for consumers who give inflated grades to the restaurants concerned. Last month at least 10 such ‘click farm’ companies were charged by the city’s regulator after being probed for the abuse.


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