As China’s economic slowdown deepens and consumer spending weakens, a digital commerce platform that promised “shared prosperity through consumer rebates” has collapsed into allegations of frozen funds, forced debt-to-equity swaps, and widespread losses among small business owners.
Shanghai Wodian Network Technology Co. Ltd. runs the platform Wodian Tech, which once claimed to serve more than 30 million members, according to Chinese media outlet Consumption Daily via digital news aggregator Zhihu. Marketed as an “innovation in digital consumption,” it attracted hundreds of thousands of merchants with promises of traffic growth, policy alignment, and long-term profit sharing.
Now, as withdrawals stall and operations unravel, a merchant who spoke to The Epoch Times said the system has exposed how loosely regulated “green points” schemes can blur the line between fintech innovation and financial pyramid structures.
The merchant spoke on the condition of anonymity out of fear of reprisal by the Chinese regime.
Promises of Growth Versus Reality
For many small merchants, the pitch was simple—join for free, accept “traffic subsidies,” and agree to share a portion of each sale in exchange for future returns.
Under the platform’s model, merchants set a “rebate rate” ranging from 3 percent to 20 percent. A portion of each transaction was withheld and converted into “green points,” which were supposed to gradually unlock and eventually translate into financial returns.
But in practice, several merchants say the system operated more like a drain on already thin profit margins.
“The more you sold, the more you lost,” a merchant from Jiangxi Province told The Epoch Times. “It made you feel like there was hope, but it was actually a trap.”
The merchant said he was introduced to the platform in late 2024. Like many small wholesalers operating on razor-thin margins, he said the promise of increased foot traffic outweighed his skepticism.
But the economics quickly turned, he said. In one example, a 10,000-yuan ($1,468) sale with a 20 percent rebate meant only 8,000 yuan in immediate revenue, and the remaining 2,000 yuan were diverted into the platform’s point system.
Although the company promoted claims that users could eventually receive up to five times their rebate value, the merchant said the actual redemption rate he observed was negligible.
“Most of my points were released at just a few percent,” he said.
By early 2026, his tens of thousands of dollars in accumulated points and unpaid balances had become effectively inaccessible.
Perceived Legitimacy and Rapid Decline
The platform’s rapid expansion was fueled in part by what the merchant described as high-profile endorsements and media exposure that gave it an air of official legitimacy.
The merchant said he was persuaded by repeated television appearances and promotional content he believed was linked to state media.
“At least seven or eight channels were promoting it,” he said, referring to programming on the state-run China Central Television.
Company founder and chairman Xiao Hancheng had been publicly recognized in various industry forums, including digital economy conferences and business events tied to consumer innovation initiatives. He also appeared on China Central Television, where he promoted the concept of “value-sharing consumption,” according to Chinese media outlet Business World via online news portal Tencent.
By mid-to-late 2025, warning signs began to emerge.
According to Consumption Daily, the company relocated its headquarters in August 2025, a move some interpreted as an attempt to reposition amid regulatory scrutiny.
By November 2025, users began reporting delays in rebate payments and voucher redemptions. The platform later extended its point redemption timeline from three years to 10 years.
At the same time, the merchant who spoke to The Epoch Times said he was encouraged to convert unpaid earnings into equity-like “internal shares” tied to a promised future listing in Hong Kong.
The company announced in November 2025 that it planned to go public in 2026 and offered pre-initial-public-offering share subscriptions.
Regulatory Gray Zones
China’s Ministry of Commerce has long warned against illegal fundraising schemes disguised as “consumption rebates” or “points-based commerce.” In early 2026, multiple regime departments reiterated bans on improper point monetization and multi-level commission structures.
But enforcement has lagged behind the rapid evolution of such platforms, particularly those framed as digital innovation aligned with consumption policy.
The merchant told The Epoch Times that he repeatedly attempted to file complaints but encountered procedural barriers, as the company’s structure appeared designed to avoid clear classification under existing financial regulations.
Legal ambiguity surrounding “green points” has complicated enforcement and civil recovery efforts for affected merchants.
For the merchant, the financial losses are only part of the story. He estimates that thousands of complaints have been filed nationwide.
He also questions how a platform that claimed massive transaction volumes and policy alignment was able to scale so quickly without stronger oversight.
“The money has gone somewhere,” he said. “They kept saying it was reinvested into the market, but at the same time, they were running constant promotions and raising more funds.”
As China continues to promote digital transformation in retail and consumption, the collapse of Wodian Tech has become a cautionary tale for small merchants navigating a slowing economy and for regulators struggling to keep pace with rapidly evolving “innovation” models that sit in a legal gray zone.
Cheng Mulan and Gu Xiaohua contributed to this report.
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