Recently, it was revealed by foreign media that the Chinese e-commerce giant Pinduoduo has been fined by the Shanghai tax authorities after a special investigation team composed of regulatory personnel from the Chinese State Market Regulatory Administration and the Taxation Bureau conducted extensive on-site inspections.
The Shanghai Changning District Taxation Bureau under the State Taxation Administration of China disclosed on January 21 that the operating entity of Pinduoduo platform (Shanghai Xunmeng Information Technology Co., Ltd.) failed to submit tax-related information as required and was ordered by the tax authorities to make corrections within a specified period. Although the company has taken corrective actions, it failed to complete them within the stipulated deadline, resulting in a penalty of 100,000 yuan imposed by the bureau on Pinduoduo.
According to reports, following the implementation of the “Internet Platform Enterprises Tax Information Reporting Regulations” in 2025, Pinduoduo did not provide the tax information of platform operators and employees within the tax scope for the third quarter of 2025 as required. In November 2025, it received a notice to make corrections, but failed to rectify the issue within the prescribed period, leading to the imposition of a 100,000 yuan fine.
Shi Zhengwen, Director of the Tax Law Research Center at China University of Political Science and Law, stated that if Pinduoduo encounters similar issues in the future, it might face more severe penalties, including temporary suspension of operations and fines ranging from 100,000 to 500,000 yuan.
On December 3, a physical altercation broke out between some Pinduoduo employees (senior executives) and the Shanghai Market Regulatory Administration officials who visited for inspection. Following the incident, some Pinduoduo staff were penalized, including administrative detention, by the Changning police in Shanghai for allegedly obstructing official duties. Reports indicated that several employees in Pinduoduo’s government affairs department were terminated following the event.
As news of the altercation spread on the mainland, Pinduoduo’s stock dropped over 2% after the opening of trading on the US stock market on December 10 and experienced a decline of over 3% in pre-market trading activities.
Furthermore, on December 16, the financial news site Caixin revealed that the conflict occurred on December 3. After the physical altercation between some Pinduoduo employees and the Market Regulatory Administration personnel, law enforcement was contacted. The Shanghai Changning police imposed penalties, including administrative detention, on the involved Pinduoduo employees for obstructing official duties. Sources close to Pinduoduo revealed that several employees of the company’s government affairs department had been dismissed after the incident, although reports related to this event by Caixin and other mainland media outlets were subsequently removed.
Bloomberg reported on January 20, citing insider sources, that a special investigation team composed of regulatory personnel from the Chinese State Market Regulatory Administration and the Taxation Bureau had conducted extensive on-site inspections. The investigation covered a range of suspected misconduct, from fraudulent deliveries to tax issues.
This large-scale investigation has also disrupted Pinduoduo’s marketing activities ahead of the Chinese New Year, with ongoing projects being delayed as employees prepare for further inspections and interviews. The incident has further compounded Pinduoduo’s challenges, as the company warned of intensifying industry competition and slowing market growth rates during its performance meeting in November last year.
In recent years, Pinduoduo has faced repeated allegations of serious counterfeit goods issues on its platform, attracting significant attention to its background and regulatory relations.
On January 14, 2024, Chinese economist Ren Zeping posted a series of questions on Weibo criticizing Pinduoduo for rampant counterfeits. He questioned Pinduoduo’s complicity in allowing thieves to flourish, calling for attention to the prevalence of counterfeit goods.
The questions he raised included concerns about the exceptionally low prices of goods, the proliferation of brands on Pinduoduo, the platform’s stance on intellectual property protection, engaging in cutthroat competition, and resorting to selling counterfeit goods, all of which raise ethical and legal issues.
Pinduoduo has yet to publicly respond to these allegations. Online discussions among netizens have reflected a mix of opinions, with some expressing the view that Pinduoduo should have been regulated earlier due to the widespread sale of counterfeit goods, while others highlighted the affordability aspect for consumers.
Apart from its domestic e-commerce platform Pinduoduo, Pinduoduo Holdings also operates the cross-border e-commerce platform Temu targeting overseas markets. Collaborating with fast fashion e-commerce Shein, Pinduoduo and Shein have accelerated the distribution of low-cost goods to European and American markets, drawing scrutiny from regulatory bodies in multiple countries.
The European Union’s competition regulation agency had previously raided Pinduoduo’s European operating headquarters in Dublin without prior notification, suspecting that Temu might have received official subsidies from the Chinese government, thereby posing unfair competition in the market.