The scathing reports have attracted the attention of China's market watchdog, the State Administration for Market Regulation. It announced on Aug 3 that Pinduoduo should strengthen platform management and regulate business activities of third-party vendors to maintain fair competition. The announcement came after officials from the regulator met with representatives from Pinduoduo amid reports of rampant counterfeits.

The regulator also announced an investigation into the reports of bogus goods being sold on Pinduoduo. It told the Shanghai Administration for Industry and Commerce, as well as other regulators, to launch targeted investigations.

It also said it would step up efforts to combat the manufacture and sale of counterfeit or substandard goods, including products that try to pass themselves off as well-known brands.

Huang Zheng, Pinduoduo CEO, said his company will "thoroughly rectify and reform" its conduct, cooperate with regulators and not shirk its responsibilities.

Pinduoduo said it is committed to fighting counterfeits, adding that it should do more to tackle the issue of products that copy those produced by leading manufacturers. "Fighting counterfeits is a long-term process. We have learned a lot from the likes of Alibaba, and imposed stricter fines on unlawful merchants," Huang added.

The company has removed more than 10 million items due to counterfeiting concerns as well as blocking over 40 million links to goods suspected of being pirated.