Firestorm hits Youxin for alleged data misrepresentation
14 Feb 2017
Youxin, a used-autos classifieds site in China, is embroiled in a data misrepresentation scandal.
On Feb. 9, a technology reporter posted a report which questioned the figure, prominently placed on the Youxin website, that the platform offered more than 1.8 million unique vehicles for purchase.
The reporter offered evidence that the figure – likely closer to 80,000 – was considerably boosted by “repeat-posting” of individual vehicles, with different independent registration numbers and different dates of initial posting, and by vehicles that were already sold but remained in the system.
The same post also noted that the company’s claim to coverage in more than 360 cities was also inflated. Only 307 cities are present on the company website, and of these only around 140 have any actual postings. Claims to cooperating with 100,000 dealers are also inflated by at least 30,000 dealers on the platform who have yet to post a single vehicle.
The firestorm surrounding the accusations couldn’t have come at a worse time for Youxin, which completed its most recent round of financing in January, when it secured $500 million U.S. in funding from TPG, Jeneration Capital and Huaxin Capital.
The final round brought total outside investment in the company to about $1 billion U.S., as Youxin had previously secured $170 million U.S. in Series C funding from Baidu, KKR and Coatue Management, six months after accepting $260 million U.S. from Warburg Pincus and Tiger Fund, among others.
As of the time of posting, it was unclear whether these investors were aware of any discrepancies.
The attributing of multiple unique registration numbers to identical vehicles brings into question Youxin’s touting of 2016 as a banner year, with total annual sales purportedly a threefold increase on 2015, and individual sales for the month of December breaking 50,000 for the first time.
This isn’t the first instance of alleged “data massaging” in the incredibly competitive Chinese used-car market, as market-leaders Guazi.com and Renrenche (https://www.renrenche.com) were forced to publicly deny similar allegations in 2016.
See the original report here: http://kankeji.baijia.baidu.com/article/769294