China’s second-richest man blasts Pinduoduo for hurting brands with cutthroat pricing

The founder of bottled water company Nongfu Spring called Pinduoduo a main contributor to aggressive pricing causing ‘huge harm for Chinese brands’

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Pinduoduo has grown its market share through aggressive pricing, which is now facing criticism. Photo: Shutterstock

Ann Caoin Shanghai

Published: 8:00pm, 21 Nov 2024Updated: 8:30pm, 21 Nov 2024

China’s second-richest man has lobbed a rare public attack on Pinduoduo, a bargain e-commerce site, alleging that the platform’s pricing system is hurting the industry.

Zhong Shanshan – the 69-year-old founder and chairman of China’s largest packaged drinks company, Nongfu Spring, and the country’s second-richest person, according to Hurun Research’s latest rankings – lashed out at the Shanghai-based shopping app for exacerbating an industry-wide price war.

“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,” Zhong said in a public speech on Wednesday. His speech was widely reported by Chinese media, including the Chinese internet portal Sina.com.

Pinduoduo did not immediately reply to a request for comment on Thursday.

Nongfu Spring founder Zhong Shanshan was worth US$47.9 billion in the latest China Rich List from Hurun Research Institute. Photo: Captured from Weibo

Pinduoduo was founded by billionaire Colin Huang Zheng in 2015. It is known for its cut-to-the-bone deals in China, serving as the blueprint for Temu, with which it shares owner PDD Holdings. Its aggressive pricing strategy has helped it quickly gain market share over the past few years.

As China’s economy has slowed and consumer spending has weakened, Pinduoduo’s ascension contributed to a fierce price war among the country’s largest e-commerce players, putting pressure on merchant profits.