Dreame reported 23 misconduct cases in the first four months of 2026, resulting in 23 employee dismissals and three referrals to law enforcement. The violations include supplier misconduct, conflicts of interest, false reimbursements, misappropriation of assets, and information leaks.

Founded in 2017, Dreame has grown into one of the fastest-growing smart home appliance companies, operating in over 100 countries with more than 6,000 physical stores and close to 40,000 employees. But rapid expansion has also heightened internal integrity risks.

According to Dreame’s report, most cases occurred in procurement and supply chain. These teams manage suppliers, contracts, budgets, and key commercial decisions, making them high-risk areas for misconduct.

Fraud in procurement usually starts with small exceptions. Common signs include:

• Long-term dominance of a purchasing category by a single supplier.
• Drift of prices above market benchmarks.
• Changes to contract terms shortly before signing.
• Years of the same employee managing the same supplier without rotation or review.
• Undisclosed ownership or family ties between employees and suppliers.
• Discrepancy between delivery records and inspection reports.
• Frequent changes to supplier bank account information.
• Concentration of procurement approvals at month-end.

Any one of these issues may have a reasonable explanation. However, when multiple warning signs appear in the same supplier relationship or procurement category, it calls for a targeted review or audit. Waiting for definitive evidence often means waiting too long.

Referrals to law enforcement also send a clear message: misconduct has real consequences, ethics aren’t optional, and management faces problems instead of ignoring them.

No company is immune to fraud, conflicts, or abuse. The real test isn’t the presence of risks, but whether leaders can catch them early, act fast, and keep improving governance.

By Sasha Zheng, Senior Researcher