China to Investigate Shopping App Pinduoduo Over Reports of Counterfeit Goods

China's market regulator has ordered market supervision departments in Shanghai to hold talks with and investigate e-commerce firm Pinduoduo Inc., following media reports of counterfeit goods and intellectual property infringements, state broadcaster China Central Television (CCTV) reported.

"Regulators will speak with Shanghai-based Pinduoduo's operators and will seriously deal with any illegal practices found on the platform," the State Administration for Market Regulation of China said on its website.

The move came after the Chinese tech startup, which has over 300 million users, raised $1.63 billion last week in the second-biggest US listing by a Chinese firm this year, which valued the company at $23.8 billion.

There are heated discussions on Pinduoduo's listing on social media, with many saying that the company's success means a great setback for China's anti-counterfeiting campaign.

Skyworth Digital Holdings Co, a Chinese smart home appliances manufacturer in the city of Shenzhen, south China's Guangdong Province, issued a statement last week asking Pinduoduo to stop selling counterfeit Skyworth products on its site.

Zheng Yuanjie, a popular writer, said on his Weibo account that pirated versions of his books were being sold on Pinduoduo, which he had reported to regulators.

On July 19, US diaper maker Daddy's Choice filed a trademark infringement lawsuit against Pinduoduo in a New York federal court. It alleged that the Chinese company "knowingly allows the sale of knockoff products bearing its name."

In response, Pinduoduo co-founder Da Da told reporters at the company's headquarters in Shanghai on Tuesday that "counterfeiting is a social issue, so it's unfair to attribute all problems to Pinduoduo, a company as young as three years old."

"Joint efforts are needed to crack down on counterfeit goods," he added.

The statement was immediately condemned by Chinese netizens and become a subject of joke among them.

"So Pinduoduo, now you can take selling counterfeit goods for granted? Although this is a social problem, you shouldn't add fuel to it," @ Sharon said.

"Da's remarks made me laugh. I used Pinduoduo to purchase discount goods once, but after I received the product I'm determined to remove the app. Bad quality!" @ Lily said.

"Pinduoduo is shameless and annoying. Age shouldn't be the company's reason to sell counterfeit goods. I do hope the authorities can severely punish its operators," a user named Xiaoqi said.