Gaopeng, the group buy joint venture between Groupon and Tencent (0700.HK), has admitted to selling counterfeit Tissot watches. SMH International Trading (Shanghai) Co. Ltd., a subsidiary of The Swatch Group and sole Tissot importer for the mainland China market, appraised the watches as counterfeit. Gaopeng has notified the authorities and begun taking legal action, as well as offering RMB 200 in compensation to all affected consumers in addition to a full refund.

Gaopeng said that the participating merchant, Tianjin Jin San Shangmao Co., Ltd., provided false documentation, and that auditing personnel failed to meet their responsibilities and will be disciplined.