PDD, best known for bargain marketplaces Pinduoduo and Temu, is grappling with scrutiny into its business and tax practices. In December, its employees exchanged blows with regulators trying to run an investigation into alleged misconduct including fraudulent deliveries. Regulators have broadened their probe since, dispatching more than 100 investigators from various agencies to its Shanghai headquarters.
The scrutiny has slowed marketing campaigns ahead of the Lunar New Year and delayed projects, as staff prepare for inspections and interviews, people familiar with the matter have said. The setback comes at a difficult time for PDD, which in November warned of a slowdown in China’s fiercely competitive market as rivals Alibaba Group Holding Ltd and JD.com Inc intensify pressure.
PDD has, in the span of a few years, grown from a scrappy VC-backed underdog into one of China’s leading e-commerce players, at one point even surpassing Alibaba in market value. Today, it is best known internationally as the owner of Temu, competing with Shein across the US and Europe.
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