BUSINESS

Analysis: Sweeping Probe Exposes China’s ‘Ghost Takeout’ Scam

Published: Apr. 23, 2026 3:29 p.m. GMT+8

00:00

00:00/00:00

Listen to this article 1x

China’s market regulator has fined seven major e-commerce platforms a combined 3.6 billion yuan ($527 million) after an investigation found they allowed unverified “ghost takeout” merchants to operate on their networks in violation of the country’s food safety rules.

The unprecedented penalties expose a sprawling black market where unlicensed virtual storefronts hijacked consumer orders and outsourced food production to the cheapest bidders, underscoring the severe food safety risks fueled by cutthroat competition among e-commerce platforms.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to Save an extra $50. Introductory offer for new readers. Subscribe now.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

China's SAMR fined seven e-commerce platforms 3.6B yuan ($527M) for unverified "ghost takeout" merchants violating food safety rules; Pinduoduo hit hardest at 1.52B yuan.
67,604 fictitious stores used forged licenses, auctioned 3.6M cake orders to real kitchens via lowest-bid systems.
Probe started July 2025; Pinduoduo obstructed investigators; new Jan regs require 6-month verifications and on-site checks.

AI generated, for reference only

Who’s Who

Pinduoduo: Pinduoduo received the largest fine of 1.52 billion yuan for allowing 9,463 unverified "ghost takeout" stores, violating food safety rules. It obstructed the investigation by refusing materials, submitting false info, and clashing with regulators; an employee swallowed a note during questioning. (48 words)

Meituan: Meituan was fined 746 million yuan by China's SAMR for allowing unverified "ghost takeout" merchants—fictitious stores with forged licenses—to operate on its platform, violating food safety rules. This was part of a 3.6 billion yuan penalty on seven platforms, amid a crackdown on illegal order transfers.

JD.com: JD.com was one of seven e-commerce platforms fined a combined 3.6 billion yuan ($527 million) by China's SAMR for allowing unverified "ghost takeout" merchants without licenses or physical spaces to operate, violating food safety rules. About 3.6 million illegal cake orders were transferred across the platforms.

Taobao Instant Commerce: Taobao Instant Commerce was one of seven e-commerce platforms fined a combined 3.6 billion yuan ($527 million) by China's SAMR on April 17 for allowing unverified "ghost takeout" merchants to operate, violating food safety rules by failing to check licenses and permitting fictitious or closed stores to handle orders. It hosted part of the 67,604 identified ghost stores.

Douyin: Douyin was one of seven e-commerce platforms fined a combined 3.6 billion yuan ($527M) by China's SAMR on April 17 for allowing unverified "ghost takeout" merchants to operate without food business licenses. The probe identified 67,604 such stores across platforms, linked to illegal order transfers and food safety risks.

Taobao: Taobao was one of seven e-commerce platforms fined by China's SAMR in a total of 3.6 billion yuan ($527M) for allowing unverified "ghost takeout" merchants to operate, violating food safety rules. It hosted some of the 67,604 fictitious stores that auctioned orders to unlicensed kitchens. Platforms failed to verify licenses properly.

Tmall: Tmall was one of seven e-commerce platforms fined a combined 3.6 billion yuan ($527 million) by China's SAMR for allowing unverified "ghost takeout" merchants without food licenses to operate, violating food safety rules. It hosted some of the 67,604 identified fake stores.

AI generated, for reference only