Just as China’s lawmakers are looking to make online retail operators directly liable for the sale of fake goods on their platforms, a prominent Chinese entrepreneur has warned counterfeit goods remain an unavoidable problem in China as the country’s online retail market grows.

Impossible task

The comment comes from Colin Huang Zheng, founder and chief executive of social commerce company Pinduoduo, who recently became one of China’s richest people after his company’s public listing in the United States. Mr Zheng credited the efforts by Alibaba Group Holding in fighting fakes for helping other companies learn how to deal with the same issue. His comments came as a response to a question about Pinduoduo’s stand against counterfeit goods sold on its platform. He said, ‘we have to go through the [same] road that other (e-commerce platforms) had gone through and the suffering they had suffered.’ Mr Huang predicted that Pinduoduo, which loosely translates as ‘buy more together,’  may develop its business faster than its predecessors, but said it was impossible to entirely avoid the problem of knock-offs in the online retail platform’s development.

Reputation

China’s draft e-commerce law may increase pressure on small platform operators to fight fakes. Part of the proposed e-commerce law, the latest draft of which was reviewed by China’s parliament last month, would make domestic online retail platform operators jointly accountable with merchants for selling any counterfeit goods online. Online merchants are currently solely liable when caught selling fake products. Once passed, the e-commerce law aims to rid online sales platforms of fake goods and clean up the country’s reputation as a major source of fake merchandise.