Pinduoduo in Crisis

Pinduoduo (PDD), a large Chinese online B2C shopping platform that targets lower-income people and features group purchases, has come under fire for indulging counterfeits since it was listed on the Nasdaq on July 26.

Many customers were shocked that PDD was listed at all, given the website, which mostly offers cheap commodities, is allegedly overrun with poor-quality and knockoff products, including counterfeits with a logo or name tag suspiciously similar to that of famous brands, such as abidas (adidas) and kuma (Puma).

On July 30, an industrial research group under Tianfeng Securities studied the top 100 home appliance products sold by PDD from June 27 to July 27 and found that 39 of them were counterfeits, with a sales volume of more than 63 percent of the total. The revelation further intensified criticism, with several top brands announcing they would sue PDD for allowing counterfeits to be sold on the platform.

Under pressure, PDD held a press conference on July 31, claiming it had been fighting counterfeits since the first day it opened and had taken more than 10 million questionable products off the shelves in the past year. But judging from the experience of Taobao and Jd.com which dominate the Chinese online shopping market, analysts say it will be hard for PDD to regain customers' trust.