SEOUL – When Lin Yunyun started selling diapers two years ago on Pinduoduo, China’s fast-growing e-commerce site, she was not prepared for the relentless nagging about prices.
Pinduoduo, popular among Chinese consumers for its discounts, sent “reminders” whenever other sellers dropped their prices below hers. When Ms Lin cut her prices, the site would temporarily promote her products – only to warn her a few days later that more reductions were needed for the site to continue driving customers to her goods.
“The platform keeps reminding me to lower prices,” said Ms Lin, 28, who lives in Zhangzhou, a city in south-eastern China. “If I cut my price any more, I won’t make any money.”
No company embodies China’s deflationary moment quite like Pinduoduo. Shoppers flock to the app for its staggering discounts, the result of its unyielding push to lower prices. As the country’s second-largest online retailer, it is the shopping destination of choice for those who embrace so-called downgraded spending – a social media-fuelled maxim of Chinese consumers’ penny-pinching ways.
Rattled by a property crisis with no end in sight and a faltering jobs market, Chinese consumers are spending less and saving more. Prices are falling and profits are shrinking. Companies are hesitant to hire more workers or invest in the future, fuelling even more concerns about the economy.
After a series of half-measures that have failed to reinvigorate the economy, Beijing has finally signalled that it is ready to take more aggressive action, though it’s unclear how far it is willing to go. In late September, the government announced interest rate cuts and other initiatives to revive the property market, as well as steps to prop up stock markets.
And despite hints of additional fiscal spending to put more money into the hands of Chinese consumers, the