Over 60 Chinese concept stocks listed in the US saw their prices dropp by more than 5 percent at Monday opening after Chinese consumer rights protection watchdogs or-dered Meituan and Pinduoduo to fix problems relating to consumer rights protection.
Pinduoduo shares closed down as much as 9.11 percent in US on Monday trading, to $121.6 per share, down over 42 percent in value compared to its record high of $212.6 per share in February.
Tencent-backed online insurer Waterdrop saw its shares tumble 12 percent on its trad-ing day at the New York Stock Exchange on Monday to close at $8.5. Shares of Mei-tuan fall over 5 percent on Tuesday opening in Hong Kong.
The fall came after the Shanghai Consumer Council on Monday night ordered Inter-net giants Pinduoduo and Meituan to fix ongoing issues relating to consumer rights.
Pinduoduo was found to have issues across product quality, infringement, forced can-cellation of orders, fake deliveries; poor after-sales service and pricing tricks to lure new users, according to the council.
The e-commerce giant was ordered to strengthen the qualification check of merchants, carry out the contract with consumers in good faith, take a serious approach to con-sumer complaints, end price gouging, and end deceitful practices used to hook new users into their platforms.
Meituan was found to have problems when it came to refunds for canceled orders, failed delivery for orders, and misleading consumers.
It was ordered to improve the service rules, especially the important content related to consumer rights and interests, fulfill the delivery of orders and reach the consumers actively for solution for those cannot be delivered, end unreasonable burdens on busi-nesses and consumers gained through its strong market position, ensure timely deliv-ery and improve the norms for the consumer rights protection in community group buying.
Both companies have pledged to carry out internal reviews and rectification of their related businesses, and will submit a rectification report to the council.