Zhong Shanshan Critiques Pinduoduo's Impact on E-commerce and Domestic Brands

The E-commerce Clash: Zhong Shanshan vs. Pinduoduo

During a recent event in Jiangxi province, Zhong Shanshan, the founder of Nongfu Spring, publicly criticized Pinduoduo for its low prices strategy that he claims harms domestic brands. He stated, “The internet platforms have brought down the prices, in particular the pricing system of Pinduoduo – they are a huge harm for Chinese brands and Chinese industries.” This rare public condemnation from such a significant figure in the industry highlights ongoing challenges in the e-commerce sector.

Impact of Pricing Wars on the E-commerce Landscape

Pinduoduo, which was founded by billionaire Colin Huang Zheng in 2015, has rapidly risen to prominence in China by offering aggressive discounts. However, as consumer spending declines, the resulting price war has eroded merchant profits among major players in China’s e-commerce landscape. The impacts of these low prices have prompted calls for reform and moderation in pricing practices.

Government's Role in Regulating E-commerce Competition

In light of the ongoing price wars, Beijing has intervened, urging platforms to reconsider their competitive tactics. This policy direction stems from concerns regarding “involution,” a term that describes the adverse effects of excessive competition.

• Pinduoduo's user base exceeds 700 million active users.
• Zhong’s call for ByteDance’s founder Zhang Yiming to apologize highlights tensions in the tech sector.
• Pinduoduo has initiated steps to combat counterfeit products in response to government and market pressures.

In a company earnings call, Zhao Jiazhen, co-CEO of PDD Holdings, indicated the company’s readiness to prioritize long-term sustainability over immediate profits.