Tuhu Wins Lawsuit: “Zhenhu Price” Deemed Unfair Competition

CNBC AI News, August 4th – A high-stakes battle in China’s burgeoning auto maintenance market has reached a resolution, centering around a contentious pricing strategy dubbed “Crush Tiger Price.”

Recently, the Minhang District People’s Court in Shanghai ruled in favor of TuHu Car, finding that the “Crush Tiger Price” campaign launched by three defendants constituted unfair competition. This marks a significant legal victory for TuHu in a sector known for its cutthroat tactics.

The legal wrangling began on September 26, 2023, the very day TuHu Car listed on the Hong Kong Stock Exchange. Amidst the IPO buzz, Miao Qin, Vice President of JD Group and President of JD Retail’s Auto Division, publicly announced an “upgrade” to JD Auto’s “Crush Tiger Price” initiative via social media. The core promise? JD Auto would undercut competitors, specifically TuHu, by 5% on all “Crush Tiger Price” items.

JD Auto had already rolled out its “Crush Tiger Price” campaign in mid-September, marketing itself with aggressively low prices. While the marketing materials strategically avoided directly naming “TuHu Car,” the market consensus was clear: the campaign was squarely aimed at disrupting TuHu’s market position.

TuHu Car argued that JD Auto’s campaign presented a misleading and disparaging depiction of TuHu’s service pricing, amplified through broad distribution channels. This, TuHu claimed, constituted commercial defamation and unfair competition.

Subsequently, TuHu Car filed a lawsuit demanding that JD Auto cease its alleged commercial defamation and false advertising, remove the offending content, and pay 5 million yuan in compensation for economic losses. The case highlights the increasingly aggressive nature of competitive strategies in China’s e-commerce landscape and the legal ramifications of such tactics.

After reviewing the evidence, the court concluded that the defendants’ actions related to the “Crush Tiger Price” campaign constituted unfair competition, setting a precedent for similar disputes in the future. The ruling sends a clear signal that while aggressive pricing strategies are commonplace, they must be grounded in fair and accurate representations of the market.