How Pinduoduo is cracking down on online counterfeiting in China

How Pinduoduo is cracking down on online counterfeiting in China

Staff Writer
Staff Writer
Pinduoduo Content Team
May 5, 2020

China is home to the largest e-commerce market in the world, making it an obvious target for counterfeiters and counterfeit goods.

Fake goods or knock off brands are not a new problem nor are they unique to China. Counterfeiters have taken to e-commerce marketplaces worldwide to sell fake products as retail shifts increasingly online. E-commerce companies have put in place measures to block and remove counterfeit listings.

Pinduoduo (PDD), which operates China’s second-largest online marketplace with more than 600 million users , has a zero-tolerance policy when it comes to fake products sold online. The company follows strict guidelines by the International Trademark Association (INTA) to strengthen and streamline anti counterfeiting procedures for identifying and taking action against offenders.

Below are some of the measures that PDD has in place to prevent counterfeit products or China fake products from listing on its platform.

  1. During the listing process, individual merchants must submit their ID cards and use facial recognition to check their identities against the national public security database. Corporate merchants must submit their business licenses and the ID cards of their legal representatives and store managers.
  2. There are restrictions on the number of stores that a merchant can set up on PDD app.
  3. Once a merchant is blacklisted because he posted a fake product or any of counterfeit items deemed illegal, the system precludes him/her from getting another account.
  4. PDD uses data analytics, artificial intelligence (AI), machine learning and image recognition to screen every product on its platform.
  5. PDD identifies potentially problematic products using text, image and behavior analysis, often assessing a merchant’s operations and records of rejected product listings to determine how likely they are to be a seller of counterfeit goods.
  6. As part of its Brand Care Program, PDD works with 1000 leading brands (intellectual property rights holders) to check the authenticity of branded products, secretly buying potentially infringing products and checking their authenticity or sending them to the rights holder for evaluation. In 2019, PDD carried out more than 60,000 test-buys and forced counterfeiters to compensate buyers for duping them.
  7. PDD runs mini programs that are tailored to the unique features of various brands. While one mini program helps verify manufacturing, logistics and delivery information linked to the particular branded product, another allows consumers to upload photos so brand experts can inspect, verify and generate a report.
  8. PDD has an online portal – in Chinese and English - to communicate with brand owners, local and international, and responds swiftly to takedown requests by rights holders.
  9. Its 10 times compensation policy, the toughest among the major e-commerce platforms in China, fines counterfeiters 10 times the value of the goods sold on the platform. This penalty exceeds what is mandated by Chinese law.  
  10. PDD takes proactive measures to remove listings and sanction merchants who are suspected of infringing intellectual property of brands. PDD also alerts law enforcement agencies to serious offenders.