China’s richest man, Zhong Shanshan, has publicly criticized online shopping platforms for sparking price wars that have negatively affected various industries, as the country grapples with an economic slowdown.
In an uncommon and largely censored statement, Zhong, the founder of Nongfu Springs, a major drinks company, also directed his frustration at the Chinese government, accusing it of being “negligent” in failing to curb the aggressive pricing strategies. It is rare for Chinese business figures to openly criticize the government, and those who have done so in the past have often faced consequences.
Zhong’s comments were made during a visit to a county in eastern China on Tuesday, where he singled out the popular e-commerce platform Pinduoduo, owned by PDD Holdings, for its role in undermining the country’s pricing system.
“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,” Zhong was quoted as saying by the state-owned media outlet The Paper. “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 has grown rapidly in recent years, largely due to its competitive pricing tactics.
In further comments not widely reported by state media, Zhong expressed his disappointment with the Chinese government for not intervening to stop the trend. “The government has not intervened in this industry orientation, and I think the government has been negligent in its duty,” he said, according to transcripts published by Sina Technology and videos shared by news outlets.
Zhong’s remarks come at a time when Chinese consumers are increasingly pinching pennies due to the country’s slowing economy and worsened job prospects. Discounts and deals have become widespread, affecting products across various sectors, including groceries, electronics, and cars. This shift in consumer behavior has impacted even premium brands, including those from Western companies.
tepol
