BEIJING – According to the local reporters, Chinese regulators are ‘investigating Pinduoduo Inc.’ after media reports of third-party vendors selling counterfeit goods on its group-discounting marketplace.
The State Administration for Mark Regulation said on its website that it will interview staff at the three-year-old firm and deal seriously with any illegal practices, such as the failure to remove listings featuring counterfeit goods. The probe comeets just days after the Shanghai-based startup raised $1.63 billion in the year’s second-biggest U.S. listing by a Chinese firm, which valued Pinduoduo at $23.8 billion.
Pinduoduo, in a statement on online news portal Netease, said it was working hard to crack down on counterfeits. The company did not respond when contacted by Reuters for comment. “We did a lot of work but are still far from meeting society’s expectations,” Pinduoduo said in the statement. Pinduoduo said it has 300 million active buyers and reaches a consumer group living outside China’s megacities. Its massive IPO saw it ranked alongside other Chinese e-commerce giants such as Alibaba Group Holding Ltd and JD.com Inc. In January, the U.S. Trade Representative put Alibaba’s Taobao platform on its blacklist for the second consecutive year over suspected counterfeits, a move the e-commerce firm said did not reflect its efforts to protect intellectual property.
On Tuesday, state-backed Beijing News said Pinduoduo removed listings for television brand “Xiaomi New Product”, which is unrelated to Chinese smart gadget maker Xiaomi Corp.
Last week, Chinese TV maker Skyworth Digital Holdings Ltd issued a statement asking Pinduoduo to stop sales of counterfeit Skyworth products on its site. In the United States, a diaper maker has filed a complaint with a federal court, claiming Pinduoduo knowingly allowed the sale of counterfeit products bearing the company’s name on its site, according to lawyers representing the diaper company. Alibaba has also been fighting an anti-counterfeit campaign amid criticism from companies and consumer groups that fake products are being sold on its online marketplaces.