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    Laundry App Denies Cutting Campus Electricity to Increase Orders

    CEO backtracks on story, claims it was a publicity stunt to get his fledgling business off the ground.

    An online laundry company, Zhai Dai Xi, may have cut the wires in university dormitories to compel students to start using their app, financial news outlet Caixin reported Wednesday.

    The story appeared in an article Tuesday profiling the company’s CEO, Guo Chaoyu, on Pencil News, a website about startups. Since the story was published, Guo faced strong criticism, and has now denied it ever happened.

    Zhai Dai Xi, meaning “laundry for you,” was founded in Hohhot, capital of northern China’s Inner Mongolia Autonomous Region, in 2015. Targeting university campuses, the company offers on-demand laundry services through its smartphone app.

    The Pencil News article is based on an interview with Guo and describes how he managed to get his young, struggling company more customers. “He came up with a bad idea: On a Thursday, he and his team chose a majority-male university and cut the wires of all dormitories’ washing machines,” it said.

    “If they have no way to wash their clothes in their dormitories for four days, it will force them to try Zhai Dai Xi,” Guo is quoted as saying. The strategy worked: Orders increased from almost zero to as many as 1,100 on a daily basis, and the company made 600,000 yuan ($90,000) in profit in the month following the “accident,” according to the article.

    The company has been growing swiftly ever since. In June, less than two months after Zhai Dai Xi first went online, its business had already developed a presence in 30 Chinese cities and secured 10 million yuan in investments.

    But the Pencil News article has brought a blemish to Zhai Dai Xi’s Cinderella story. The cord-cutting excerpt was spread on social media, leading to criticism that the company had taken an immoral approach to promoting its brand.

    “There must be accountability,” wrote Ye Tan, a commentator for Financial Times Chinese, on her Weibo microblog. “It’s not only about what is fair and just; this issue speaks to whether China’s economy can have a successful transformation, whether the made-in-China brand will eventually win the trust of foreign customers.”

    A microblog belonging to the police of Anhui province in eastern China took the opportunity to remind its followers that according to the Public Security Administration Punishment Law, intentionally damaging public or private property can lead to detention for five to 10 days and a fine of up to 500 yuan.

    On Wednesday Guo posted an official statement on the company’s microblog in which he denies he and his team ever cut wires, saying he made the story up as a way to get noticed. “We wanted faster promotion of our brand, and that’s why our PR team came up with the wire-cutting story,” he wrote. Zhai Dai Xi did not reply to a request for comment.

    “I’m deeply sorry, but I hope everyone will give Zhai Dai Xi a chance,” he said at the end of the post. “It’s not easy starting a business.”

    (Header image: A laundry room at the Beijing Film Academy, March 2, 2008. VCG)