Government Subsidies and Pricing Tactics Draw Scrutiny During 618 Festival: Midea Accused of Price Manipulation

The 2025 618 shopping festival, initially positioned as a major promotional event with broad subsidies and discounts, has sparked controversy over pricing practices—particularly concerning Midea (000333.SZ). Consumers have alleged that the home appliance company employed misleading pricing strategies, including frequent daily price changes, post-discount price increases, and unclear “price protection” terms. Notably, one dishwasher model reportedly saw three price adjustments within a single day, with an overall increase exceeding RMB 300. What began as a national consumption campaign has, for some, turned into a trust crisis.

This year’s 618 promotions appeared more aggressive than in prior years. Government subsidies were introduced, and e-commerce platforms such as JD.com and Tmall offered discounts in the range of 15%-20% and “20% + 10% off” bundles, respectively. The campaign period was extended, commencing on May 13, with a warm-up phase lasting until May 28. However, these measures have raised concerns among consumers, who claim the discounts may have been used to obscure actual price increases.

Midea (000333.SZ) was at the center of many complaints. Some consumers reported that, even after applying the full range of subsidies, final prices exceeded the standard retail price. One buyer stated they paid RMB 100 more for a product following discount application.

Additional concerns were raised regarding price fluctuations. For example, a Midea water purifier was initially excluded from subsidy stacking during the first 618 round, resulting in a final price of RMB 1,878. In the second round, the product became subsidy-eligible and dropped to RMB 1,655—a difference of RMB 223.

Promotional discrepancies were also noted. One user described purchasing a Midea dishwasher advertised at a 618 price of RMB 1,943, but the final checkout amount reached RMB 2,136 after following the store’s stated discount process. Another consumer encountered a similar issue with a dehumidifier: despite government and platform subsidies having ended, some platforms continued to promote it at a "low price" under dual-discount banners—prompting accusations of misleading promotion.

Volatility in daily pricing also fueled dissatisfaction. Numerous consumers shared experiences of "wave-style promotions" and frequent adjustments. One Midea dishwasher model was reportedly priced at RMB 3,796 during the day, increased to RMB 3,996 in the evening, and further rose to RMB 4,131 within the same day—an overall increase exceeding RMB 300. One customer claimed they had previously bought the same model before the 618 campaign for RMB 2,891, which was lower than both the "original price" of RMB 3,614 and the campaign's discounted price.

As of now, 64 unresolved complaints regarding Midea’s price fluctuations and promotional inconsistencies remain on the Black Cat complaint platform. Although Midea’s customer service has issued apologies and indicated follow-up actions in some cases, consumer dissatisfaction has persisted. Midea's “price protection” policy has also drawn criticism. Consumers have reported that when applying for refunds due to post-purchase price drops, they discovered key components of the discounts—such as government subsidies, platform vouchers, limited-time deals, and red packets—were excluded from the guarantee.

One user who bought a Midea refrigerator for RMB 1,504 on June 5 noted the same product was offered for RMB 1,272 two days later—a reduction of RMB 232. However, the refund request was rejected on the grounds that “government subsidies are not covered under the price guarantee.” This type of exclusion has become a common complaint, particularly regarding “billion-yuan subsidies,” which are often explicitly outside the scope of price protection.

Inconsistencies between advertising and actual policy terms have also been flagged. One user reported purchasing a Midea air conditioner labeled with both “Billion-Yuan Subsidy” and “618 Price Guarantee,” but when a subsequent price drop occurred, their refund was declined. The actual policy, buried within the product details, limited the guarantee to a 7-day window and excluded products with the advertised subsidy.

Other home appliance companies have faced similar criticism. A consumer claimed they were denied a RMB 100 refund on a Hisense refrigerator, despite the product being marketed with a 30-day price protection guarantee. Hisense（600690.SH）responded that the case had been escalated internally, though trust had already been eroded.

Numerous complaints related to price protection remain active on the Black Cat platform, with users citing rejections during the stated guarantee period and platforms and merchants shifting responsibility. In practice, the exclusions render the price protection ineffective. Consumers often only become aware of the limitations after being affected, and most fail to receive compensation.
The pricing controversy reflects broader systemic pressures facing the e-commerce sector amid increasing competition and rising costs. For merchants, the 618 festival is no longer solely about clearing inventory or boosting visibility—it has become a financial battleground.

Reports indicate that merchants bear significant expenses during these events. Costs include bidirectional shipping (with mandatory shipping insurance in some cases), platform commissions of 3%-5% (deducted in real time), and rising logistics costs—from RMB 3 to RMB 7 per order. Advertising costs further strain margins, pushing the average cost per order to RMB 10. In addition, platform-imposed purchase insurance can lead to a surge in non-committal orders, further squeezing profits. Many sellers have commented that the more they promote, the more they lose.

A clothing merchant surnamed Li explained that the price protection mechanism itself creates operational risks. “We can’t control platform coupons or government subsidies. Prices shift rapidly, and we can’t always keep up. But consumers hold the brand responsible.” Some consumers, upon finding a lower price, either demand a partial refund or return and repurchase—incurring double costs for sellers. This also inflates transaction data, as returned items are counted as new orders.

Changes to platform rules have added further uncertainty. This year, the cancellation of the pre-sale model forced merchants to stock up early. Pricing misjudgments or lower post-launch prices led to large-scale refund requests, complicating inventory management. In the women’s apparel sector, resale rates have reached 50%, with some items requiring 7–8 listings before being sold.
Traffic competition among platforms is also a contributing factor. Zhang Ming, a home appliance professional in Chongqing, observed a 70% decline in GMV during the first four hours of this year’s 618, with some product categories achieving only 10% of last year’s volumes. On May 16, daily sales fell below those recorded on Mother's Day.

E-commerce platforms are increasingly dependent on paid traffic amid declining organic reach. Reports indicate that in 2024, average cost-per-click (CPC) in the snack category rose 30% from the previous year, with paid traffic accounting for 70% of total volume. The resulting rise in customer acquisition costs has placed immense pressure on small and medium-sized businesses.
A Suzhou-based food merchant shared that their daily orders dropped from 120 to 50—a decline of nearly 60%—despite reducing profit margins. “We spent RMB 50 on promotion that morning and didn’t sell a single product,” the merchant stated.

Algorithm changes have further reshaped traffic distribution. After Taobao’s 2025 algorithm adjustment, search traffic declined from 42% to 28%, while recommendation traffic rose to over 51%. Over the past five years, the average cost of acquiring a new customer has increased from RMB 13 in 2020 to RMB 42 in 2025—a 223% rise. This cost-revenue imbalance has severely impacted business sustainability.

Liu Ying, a tea merchant in Fujian, confirmed: “There’s basically no organic traffic anymore. Sometimes our ad spend is higher than our total revenue.” This illustrates the growing difficulty and risk businesses face under the current high-cost, low-conversion environment.

A broader concern lies in platform oversight. Insufficient regulation has allowed opaque pricing strategies and restrictive price protection policies to persist. At the heart of the conflict is a tension between platforms seeking to attract consumers with low prices and neglecting the operational burdens borne by merchants. If sellers compromise trust and brand integrity to survive, platform ecosystems may ultimately suffer.