Internet & Tech

Capital offence

Anger festers after employee’s death at a top internet firm


Pinduoduo: facing a backlash

Political theorists in the Communist Party of China (CPC) have struggled to produce a satisfying answer to a simple question: “Does the market have a socialist or capitalist surname?”

The query – which sounds a little awkward in its English translation – was initially phrased when Deng Xiaoping began to usher in his economic reforms in the late 1970s. The changes soon created splits in the country’s ruling Party but Deng managed to convince other leaders to put the debate aside and focus instead on rebuilding an economy laid low by decades of Maoist doctrine.

Since then, political thinkers have returned to the question of the complex relationship between China’s free-market instincts and its socialist political philosophy. But this month one of China’s fastest-growing internet companies found itself having to address the unanswered question too.

The saga began when a 23 year-old female employee of e-commerce giant Pinduodou collapsed as she was returning home on December 29.

Surnamed Zhang, she died soon after being hospitalised.

Zhang’s death did not solicit much attention until earlier this week, when one of her friends shared news of it on the social media platform Maimai.

According to the post, Zhang had joined Pinduoduo in July 2019 and worked for the company’s newly founded ‘Tuan e-commerce’ – or community group-buying unit – (see WiC521) in Xinjiang.

Zhang had worked long hours at Pinduoduo, her friend said, blaming the gruelling work schedule for her premature and tragic death.

The post quickly drew thousands of shares and comments, and the hashtag “Pinduoduo employee sudden death” was viewed more than 300 million times on weibo as of Thursday this week. Many contributors accused Pinduoduo, and other big tech players, of being ‘evil capitalists’ who sucked the life out of their workforces in a bid to maintain their breakneck growth.

Some comments even described Pinduoduo as a “blood and sweat factory”, castigating it with a nickname earlier bestowed on contract manufacturer Foxconn following a slew of employee suicides in 2010 (see WiC63).

The furore fed from long-running complaints about the brutal hours at many tech companies, known as the ‘996’ culture, or working from 9am to 9pm for six days a week.

Pinduoduo invited further trouble this week with a statement posted on its official social media account. “Just look at all those people at the grass roots [of society]. Who isn’t working so hard for their money?” the post suggested, rather misjudging the public mood.

“We never thought of this as a problem of capital but rather a problem of our society,” it added.

Coming at a time when the internet majors are facing greater governmental scrutiny over antitrust concerns (see prior article), Pinduoduo’s response further stirred the debate over whether internet firms should have a “socialist or capitalist surname”.

Pinduoduo quickly realised it had stepped into an area of political taboo. It immediately apologised and deleted its weibo post, even blaming a third-party PR company for the insensitive response. Yet the saga has already prompted regulators to act – authorities in Shanghai, where Pinduoduo is registered, are said to have launched a probe into the working conditions for Pinduoduo staff.

Meanwhile, the State Administration for Market Regulation (SAMR) – which rattled investors in November by outlining draft antitrust rules for ‘internet platforms’ – has stepped in to curb the mushrooming growth of the community group-buying sector.

According to local media, SAMR has invited executives from a number of internet giants including Pinduoduo and Alibaba for meetings on the topic and warned them against competing for market share with unsustainably low prices. (It will be little surprise if the working hours of the companies’ staff was brought up as a concern as well.)

“Don’t just think about a few bundles of cabbages and a few pounds of fruit,” the People’s Daily demanded in a commentary last month, referring to the way the new community group-buying ‘Tuan’ sector has been putting smaller, neighbourhood stores out of business by squeezing them out of local commerce. Rather than signing the death warrants of these grassroots retailers, the newspaper instructed, China’s tech majors should divert more of their resources to developing key components like semiconductors that upgrade the nation’s technology base.

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.