Pinduoduo, one of China’s hottest e-commerce apps, is being accused in a federal court in New York over alleged counterfeit listings by the U.S. diaper maker Daddy’s Choice, right before the meteoric Chinese e-commerce startup, a Facebook+Groupon mashup, is preparing for its Nasdaq IPO.
The company had previously cracked down on counterfeit goods on its platform, punishing over 200 stores in June, but that also resulted in a protest at its Shanghai headquarters by some of the merchants whose stores were shut down on its platform. Pinduoduo also said in regulatory filings to the SEC that Chinese authorities had in January told the company to strengthen supervision over claims of copyright infringement.
Pinduoduo’s app allows for users to group together to get more discount from merchants. Backed by Tencent Holdings and Sequoia Capital, the Shanghai-based firm has seen a meteoric rise in the last few years, making it the second e-commerce platform provider after Alibaba with 344 million active buyers last year, surpassing JD.com in the process. It is trying to raise up to US$1.63 billion through American Depositary Shares on Nasdaq.
Editor: Ben Jiang