Pinduoduo removes 4.3 million listings in crackdown on fake goods after stock takes a hammering

Shanghai-based company takes steps to address concerns about counterfeit goods sold on its e-commerce platform

PUBLISHED : Thursday, 23 August, 2018, 1:29pm
UPDATED : Thursday, 23 August, 2018, 2:40pm

Pinduoduo is making good on the promise it made to investors and consumers to strengthen its measures against knock-offs, after its stock price took a hammering following a spate of negative press calling the company out for inferior and imitation products.

On Wednesday, Pinduoduo issued an open letter about the steps it had taken to prevent the sale of fake goods. In the week spanning August 2 to 9, the company said it shut down 1,128 stores, took down 4.3 million listings, as well as blocked 450,000 suspected counterfeit good listings from going up on the platform.

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The company also said that it will redirect users who search for counterfeit brand names to the legitimate listings, and has set up an email channel to allow consumers and brands to report any suspicious listings.

“We have reflected on this painful lesson and learned from it,” according to its statement. “Pinduoduo will fix our shortcomings and fill the loopholes … to solve the problems one by one and change for the better by using consumer interests as the starting point”.

The open letter comes as the Shanghai-based company faces regulatory scrutiny and a backlash from consumers and brands for allowing knock-off and poor-quality products on its platform soon after it went public.

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Earlier this month, Pinduoduo chief executive Colin Huang had expressed contrition, acknowledging that Pinduoduo had “yet to do enough to tackle the issue of imitation products” and pledged to put into place a better mechanism to fight fakes.

In the three years since its founding, Pinduoduo has rapidly gained market share in China is currently the third-largest e-commerce firm in the country behind Alibaba and

In July, Pinduoduo debuted on Nasdaq to much fanfare, with its stock price surging from the initial offering price of US$19 to close as high as US$26.70 on its first day of trading.

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Since then, its stock has taken a beating, closing at a record low of US$18.40 on Wednesday as various US law firms announced the filing of class action lawsuits against the company.
The suits contend that Pinduoduo misled investors since its controls on third-party sellers were ineffective in blocking the sale of counterfeit goods and its revenue was traceable to unlawful conduct.

A Pinduoduo spokeswoman previously said that the company employs similar measures to Alibaba when it comes to fighting fakes, but did not elaborate on what the specific technologies were.

Back home, dissatisfied customers complained about the inferior products on the site.

Chinese regulators probe Pinduoduo for sale of fake, imitation goods

A 9.9 yuan pair of black slippers on Pinduoduo made its rounds in social media posts after users complained that their feet turned black with the dye. TV maker Shenzhen Skyworth Digital Technology issued a statement that Pinduoduo listed many counterfeit Skyworth-branded products and called for the platform to take down such listings.

The complaints prompted the State Administration for Market Regulation (SAMR) to step in, with the regulator calling for an investigation into the copyright infringement of products on Pinduoduo.