In December 2025, a physical altercation broke out between some employees (senior management) of the Chinese e-commerce giant Pinduoduo and personnel from the local Market Regulatory Authority who came for an on-site inspection. Following the incident, official regulatory authorities expanded the scope of their investigation into Pinduoduo. Over the past few weeks, more than one hundred investigators from various departments have visited Pinduoduo’s headquarters in Shanghai.
According to reports from foreign media outlets, a special investigative team composed of officials from the National Market Regulatory Authority and the Taxation Bureau has been conducting extensive on-site inspections. The investigation covers a range of suspected improper behaviors, including fraudulent deliveries and tax issues.
This large-scale investigation has also caused a slowdown in Pinduoduo’s marketing activities leading up to the Chinese New Year, with ongoing projects being delayed as employees prepare for further inspections and interviews.
This incident has dealt a heavy blow to Pinduoduo. During its performance meeting in November last year, Pinduoduo issued a warning about intensifying industry competition and a slowing market growth rate.
The physical altercation between some senior executives of Pinduoduo and officials from the Market Regulatory Authority in December 2025 at Pinduoduo’s Shanghai office location spread rapidly on Chinese social media platforms, sending shockwaves through the market and among investors.
On December 10, Pinduoduo’s stock plunged over 2% after the opening of the U.S. stock market, dropping more than 3% in pre-market trading.
On December 16, Caixin further revealed that the conflict occurred on December 3. Following the physical altercation between some Pinduoduo employees and Market Regulatory personnel, the Market Regulatory staff reported the incident to the police. The Changning police in Shanghai penalized the involved Pinduoduo employees, including administrative detention, for “obstructing official duties.” Sources close to Pinduoduo disclosed that several employees from the company’s government affairs department have been dismissed in the aftermath of the incident.
It is noteworthy that related reports by mainland Chinese media have been taken down.
In recent years, Pinduoduo has been repeatedly criticized for the prevalence of counterfeit goods on its platform, and its background and regulatory relationships have been closely scrutinized. Apart from the domestic e-commerce platform Pinduoduo, Pinduoduo Holdings also includes the cross-border e-commerce platform Temu targeting overseas markets.
In recent years, Pinduoduo and fast-fashion e-commerce platform Shein have both accelerated the sale of low-priced goods to European and American markets, drawing attention from regulatory bodies in multiple countries. The European Union’s competition regulatory agency previously suspected Temu of potentially receiving subsidies from the Chinese government, leading to unfair competition. Without prior notice, the agency conducted a surprise raid on Temu’s European operations headquarters in Dublin.
Furthermore, on December 2 of last year, Australian market research firm Roy Morgan released the latest quarterly Brand Trust Report up to September 2025. The report indicated a continuing decline in trust in online shopping platforms and marketplaces, with the Chinese cross-border e-commerce platform Temu ranking fifth in the annual “least trusted brand” list.
Roy Morgan’s analysis pointed out that the trust crisis in online market platforms stems mainly from ethical controversies and product quality issues. Levine, the research director at the agency, stated that consumers are showing a trend of “the more purchases made, the stronger the sense of distrust” towards platforms like Temu and Shein, citing reasons such as poor product quality, lack of business ethics, dishonest behaviors, and concerns regarding data privacy.