PDD ordered to fix refund policy

China's top markets watchdog summoned PDD executives to order the company to fix its refunds-first policy.

The State Administration for Market Regulation and Ministry of Commerce said the policy - which lets shoppers claim refunds without returning purchased goods - placed an unfair burden on small merchants, people familiar with the matter said.

PDD's Pinduoduo online store connects hundreds of thousands of small shops with Chinese consumers and the company withholds payments to merchants if they're judged to have fallen short of customer expectations.

PDD and its Temu platform exploded onto the scene in 2023 with expensive Super Bowl ads. That breakneck global expansion at one point helped US-listed PDD become China's most valuable e-commerce firm.

Around September, Chinese officials from agencies including the SAMR and commerce ministry held closed-door seminars with merchants and e-commerce platforms about the policies, two attendees said. Both JD and Alibaba now have stricter policies and a partial instead of full refund is more often the rule, shoppers and merchants say.

Bloomberg