The store will be closed by December 31 and after a transitional period of three months, the company will completely close down the website of Paipai.com.
“The shutdown of the C2C platform is in line with the company’s policy to combat the marketing and sale of counterfeit products and the company will make persistent efforts to protect the interests of consumers and brands,” JD.com said in a statement.
Paipai.com, along with another site Wanggou, were acquired from WeChat parent Tencent in March 2014. The combined businesses have a goodwill and intangible asset value of US$400 million, making it a very expensive gesture in the war against counterfeit goods in Mainland China.
The company says it has yet to calculate the book value of the loss given the two websites are accounted for in the books as a combined entity and Wanggou will continue to operate.
While JD.com is amputating a limb, Alibaba is undergoing a high profile battle in the US courts with French luxury brand owner Kering which alleges Alibaba has failed to take sufficient steps to counter the trading of counterfeit goods on its various websites, as reported by Inside Retail Asia last week.