Television manufacturer Skyworth Group Co Ltd has issued a statement demanding that online group discounter Pinduoduo Inc stop selling counterfeit versions of its products on the platform.
The demand follows Pinduoduo's successful IPO on the Nasdaq stock exchange last week.
Skyworth is the first company to make a public move to protect its rights and fight counterfeits on Pinduoduo's online platform. The company said it reserves the right to sue the social-commerce discounter for selling fake products.
Pinduoduo debuted on the Nasdaq Stock Market last Thursday, with its shares rocketing by more than 40 percent on its first trading day. Its focus on user recommendations and social networking to boost sales has set it apart from the traditional search engine model adopted by most e-commerce firms, such as Amazon.com Inc and Alibaba Group Holding Ltd.
Copycat brands with names and products similar to those of Samsung, Xiaomi, Huawei, Vivo and Oppo have been sold on Pinduoduo, and their prices are listed for just several hundred yuan. One TV, branded SHAASUIVG, which sounds like Samsung, is made by a Sichuan-based consumer electronics company. It is priced at 388 yuan ($56.80), more than 10 times cheaper than the set produced by the South Korean tech giant.
The Shanghai-based company has long faced allegations that products on its platform are fake or substandard, and involve trademark infringements.
"Fighting counterfeits is a long-term process. We have learned a lot from the likes of Alibaba and imposed stricter fines on unlawful merchants," said Colin Huang, Pinduoduo's founder and chairman, during a media briefing last week.
You Yunting, a lawyer and partner at Shanghai-based DeBund Law Offices, said as an online retailer, Pinduoduo should check the quality and authenticity of the products sold on its platform. The company should be held jointly liable for any infringements due to supervisory negligence, You said.
"With Pinduoduo's rapid expansion in terms of users and merchants, loopholes have appeared. It should ramp up efforts to raise the entry threshold, inspect the merchants' qualifications, and screen out fake goods by virtue of artificial intelligence, big data and consumers' evaluations," said Wang Huie, a senior analyst at Beijing-based internet consultancy Analysys.
China's social e-commerce sector is expected to reach 1.14 trillion yuan in industry scale in 2018, with a year-on-year increase of 66.7 percent, according to a report released at the 2018 China Internet Conference earlier this month.
