China’s Richest Individual Criticizes E-Commerce Giants and Government Amid Economic Downturn

China’s wealthiest individual, Zhong Shanshan, recently criticized online shopping platforms, blaming them for igniting price wars that have hurt various industries as the country grapples with an economic slowdown. His unusually candid comments, which have largely been censored by state-controlled media, also targeted the Chinese government for its inaction, accusing it of negligence in failing to control aggressive pricing practices.

During a visit to an eastern county in China on Tuesday, Zhong specifically criticized Pinduoduo, a popular e-commerce platform owned by PDD Holdings, for damaging Chinese brands and industries. According to reports from state-owned outlet The Paper, he asserted that internet platforms have disrupted traditional pricing systems, singling out Pinduoduo for causing significant harm. He emphasized that the trend went beyond just bad money pushing out good; it had reshaped the industry’s direction, with price competition becoming a dominant force.

Pinduoduo’s recent success has been fueled by its aggressive discounting strategies, which have contributed to its rapid growth over the past few years. However, Zhong’s criticism did not stop with the e-commerce giants. In remarks that were less widely publicized, he also blamed the Chinese government for not stepping in to curb these pricing practices. According to a transcript from Sina Technology and videos shared online, he argued that the authorities had failed in their responsibility to regulate the market, leading to a damaging shift in industry standards.

The comments come at a time of heightened scrutiny over public criticism of the Chinese government by business leaders. The risks of speaking out have been highlighted in the past, notably when Alibaba’s Jack Ma criticized China’s financial regulators in 2020. Shortly after his comments, Ant Group, Alibaba’s financial arm, abruptly halted its $37 billion IPO, and Ma retreated from public view as Beijing launched a crackdown on the tech industry.

Pinduoduo, established in 2015 by Colin Huang, has thrived by capitalizing on shifting consumer behaviors in a slowing economy. As economic conditions tighten and job opportunities dwindle, Chinese consumers are increasingly seeking bargains on everything from food to electronics and vehicles. Discounts are now a common feature across various brands, including Western companies that traditionally cater to high-end consumers. This widespread push for lower prices has had a significant impact on the broader economy.

Zhong’s statements follow a challenging year for the billionaire. Earlier in the year, he faced a wave of criticism from nationalist circles, accusing him of lacking patriotism—a campaign that dented the share price of his company, Nongfu Springs, and affected sales. The negative attention erased tens of billions from Nongfu’s market value and, in August, briefly cost Zhong his status as China’s richest individual to Colin Huang, who still maintains a stake in the company he founded. However, Zhong has since regained his top spot, with an estimated net worth of $52.2 billion.

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