The CEO of online retailer Pinduoduo has hit back at Chinese regulators which are set to investigate allegations of counterfeiting on the platform.
China’s State Administration for Market Regulation (SMRA) this week asked regulators in Shanghai to investigate Pinduoduo for hosting IP-infringing goods, as reported by Reuters today.
Pinduoduo was founded in 2015 and is now the third largest e-commerce platform in China behind Alibaba and JD.com. More than one million sellers are active on the site.
However, since launching, Pinduoduo has been accused of selling counterfeit versions of goods produced by brands including Samsung, Apple, and Coca-Cola, Reuters said.
Chinese TV manufacturer Skyworth Digital recently issued a statement demanding that Pinduoduo stops selling counterfeit versions of its products.
Colin Huang Sheng, CEO of the platform, has responded to the planned investigation by declaring that counterfeit goods are an “unavoidable problem” amid the growth of China’s online retail market, according to the South China Morning Post.
In response to the SMRA’s request, Sheng said it is “impossible” to avoid the problem of knock-offs when developing an online retail platform. He added that Pinduoduo has been “maliciously” targeted by regulators and the media.
Sheng claimed that Pinduoduo has already taken down more than ten million product listings due to concerns about counterfeiting, in addition to removing more than 40 million listings which violated copyright.
Pinduoduo is working with more than 400 brands to fight counterfeiters and has a dedicated fund that enables the company to immediately investigate any report of IP infringement, as well as refund any injured consumers, Sheng said.
The Chinese government is currently seeking to make domestic online retail platforms jointly accountable with sellers for the distribution of counterfeit goods. Currently, the sellers are solely liable when they sell fake products on an e-commerce platform.
China’s Parliament (National People's Congress) reviewed the latest draft of the proposed e-commerce law last month, the South China Morning Post said.
Sheng is reportedly worth $13.8 billion, following Pinduoduo’s public listing on the US market last week.