Pinduoduo in disputes with store owners after quality crackdown

Pinduoduo (拼多多), a money-for-value social-networking-based e-commerce platform, is now in disputes with store-owners doing business on the platform.

Store owners believed Pinduoduo executed improper standards when evaluating their products. The platform launched a wave of internal quality and authenticity check to crack down on counterfeit goods. Suspicious products examined would be labeled in quality ranks A, B, C, and D, in which A stands for the worst situation. As punishment, Pinduoduo will freeze the store owners’ business trading accounts and orders. The owner is demanded to compensate consumers’ loss by paying up to 300% respective sales revenues.

According to a store owner, Pinduoduo didn’t specify why after 3 months’ legal operation, his products were labeled as A goods. He told local media (in Chinese), if it’s just about one shipment of the goods he sold, he doesn’t understand why would the platform demand to freeze almost all of his trading orders in the recent 3 months. This owner added that he has to pay an extra RMB 180,000 fine besides the punishment fee to resume his business on Pinduoduo.

The owner also explained that Pinduoduo informed him with the check result in simple chat texts. No examination reports or third-party witnesses were available.

To demand explanation, 14 store owners protested in Pinduoduo’ s office building in Shanghai (ifeng.com video record in Chinese). Pinduoduo responded yesterday that the platform maintains its punishment decision made on all 14 stores, and that the company holds “solid evidence (证据确实)”.