ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
China tech

China fines SoftBank-backed ed-tech unicorn for false advertising

Zuoyebang among two industry startups slapped with $390,000 penalty

Zuoyebang, an online tutor backed by SoftBank and Alibaba, falsely claimed an association with the United Nations, according to Chinese authorities. (Photo by Shin Watanabe)

DALIAN, China -- Chinese market regulators have fined a pair of major distance learning startups 2.5 million yuan ($387,000) each for engaging in false advertising and misleading consumers on pricing.

Zuoyebang, an online tutor backed by SoftBank Group and Alibaba Group Holding, was found to have stated falsely on its website that the company is working in cooperation with the United Nations. Yuanfudao, an ed-tech startup with Tencent Holdings among its investors, claimed incorrectly that it offered "one-on-one teaching."

Both companies deceptively presented prices as discounts, China's State Administration for Market Regulation said earlier this week.

Zuoyebang and Yuanfudao said they have finished reforming business practices concerning the advertising and price listings.

"We accept [the punishment] in good faith, and we will strictly follow the law," a Zuoyebang representative told Nikkei.

Yuanfudao released a statement saying the company will "properly fulfill social responsibilities" and "strengthen business standards."

The unlisted startups, both based in Beijing, are considered unicorns with valuations well above $1 billion. Zuoyebang's valuation is estimated at $10 billion, with Yuanfudao reaching $15.5 billion after an October 2020 funding round.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more