Tsann Kuen Group (燦坤實業), operator of the nation's largest consumer electronics and home appliance chain by revenue, was fined NT$1.28 million (US$40,000) yesterday by the Fair Trade Commission over fraudulent and misleading advertising.
The commission cited a Tsann Kuen advertising campaign last August claiming that special promotions for models of Dopod smartphones would be held between Aug. 2 and Aug. 7.
A consumer placed an order for a Dopod818 on Aug. 3 but the company later informed him that this model was out of stock and they would not be restocking the product.
The consumer filed a complaint with the commission, saying Tsann Kuen was exaggerating product promotions to boost consumer visits as the advertisements did not specify there were only a limited number of Dopod smartphones available.
As such, the commission yesterday imposed the fine according to Article 21 and Article 41 of the Fair Trade Act (公平交易法), its press release said.
This is not the first time Tsann Kuen has breached the act.
To survive in the saturated consumer electronics retail market, the market leader has waged aggressive price wars, which have prompted the Fair Trade Commission to investigate misleading promotions several times with punishments meted out.
Tsann Kuen reported a revenue drop last month as the retail market continued to suffer from rising consumer loans and weak stock performances amid political disputes and bad weather.
The firm recorded sales of NT$2.08 billion last month, down by 3.64 percent from a year ago. Its shares closed down NT$0.5 at NT$39.5 on the TAIEX yesterday.
E-Life Mall, the No.2 operator, reported sales of NT$1.09 billion at the same time, sliding by 12.76 percent year-on-year.
The comparatively small and new player Fortress has decided to pull out of the market.
Fortress, Hong Kong's largest consumer electronics and home appliances retailer, shut down six of its 14 outlets here in April. It is scheduled to turn a further six stores over to Watsons Taiwan, the nation's largest health and cosmetics chain.
Fortress and Watsons are sister companies under the AS Watson Group.
Fortress, which entered the local market in 1998, has decided to close its remaining two stores on Monday, reported the Chinese-language Economic Daily News on Wednesday. But the company's Taiwan executives would not confirm the report.
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