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Zhong Shanshan, the richest man in China, has lambasted online shopping platforms for triggering price wars that have severely impacted industries amid the country’s ongoing economic slump. Mr Shanshan, founder of the drinks company Nongfu Springs, also expressed his frustration with the Chinese government, claiming it was “negligent” in addressing the harmful pricing trend.
Speaking during a visit to a county in eastern China on Tuesday, Mr Shanshan took direct aim at the popular e-commerce platform Pinduoduo, owned by PDD Holdings, which has been known for its aggressive pricing strategies. “Internet platforms have brought down (our) pricing system. In particular, Pinduoduo’s pricing system has done great harm to China’s brands and its industries,” Mr Shanshan said, as per CNN. “It is not just that bad money is driving out good money. It is an (entire) industry orientation, and pricing (has become) the industry orientation.”
Pinduoduo’s rapid growth has been fuelled in part by its highly competitive pricing. Mr Shanshan’s remarks come at a time when Chinese consumers, facing a slowing economy and shrinking job prospects, are increasingly seeking discounts across various sectors, from groceries to electronics.
Mr Shanshan also criticised the Chinese government for its inaction in regulating these pricing practices. “The government has not intervened in this industry orientation, and I think the government has been negligent in its duty,” he added, according to a transcript from Sina Technology and several videos shared by Chinese news outlets.
Back in November 2020, Alibaba co-founder Jack Ma faced a similar fate after he publicly criticised China’s banks and financial regulators. His remarks led to a crackdown on his companies, including the abrupt halting of Ant Group’s $37 billion IPO, one of the largest in history.
The fallout from this criticism also led to Mr Ma retreating from the public eye, and Beijing launching an extensive crackdown on the tech sector, impacting many firms, including Pinduoduo.
