US daily deals giant Groupon has apologised after it was discovered that its Chinese arm was selling fake watches to customers in China.
The controversy, which comes just days after Groupon launched its own IPO, surfaced after hundreds of people reported that they had been sold fake watches under a discount deal in which they took part in.
The deal allowed people to purchase watches for 690 yuan (£67), significantly less than their actual retail price, according to The Guardian.
Later, Gaopeng.com, the Groupon joint venture in China, informed that the agent which had offered the deal submitted fake documents. The company said that it had taken legal action against the seller which had supplied the fake products.
"We are deeply sorry about the inconvenience the matter caused for consumers," Groupon said in a statement, adding that it plans to fully refund consumers who had bought the fake watches and even give them up to 400 yuan in additional compensation.
The watches were copies of popular watch brand Tissot, which is owned by the Swatch Group. Groupon, which started its Chinese operations after entering into a joint venture with Tencent, said the issue had exposed negligence on the part of its own staff and vowed to mend things.