Chinese language behemoth Pinduoduo to tackle Amazon in US – with even worse labor practices

Chinese language behemoth Pinduoduo to tackle Amazon in US – with even worse labor practices

Americans hooked on Amazon might quickly be wooed by a Chinese language tech big most of them have by no means heard of. Pinduoduo is planning to develop its attain to the US subsequent month, based on reviews in Bloomberg and Reuters. The corporate is understood for delivering items at rock-bottom costs – whereas placing its staff by way of circumstances {that a} outstanding labor activist says ought to horrify People.

Described by its founder, the previous Google worker Colin Huang, as a cross between “Costco and Disneyland”, Pinduoduo has ridden a wave of meteoric Chinese language tech progress to change into one of many largest e-commerce firms on the earth since its founding in 2015.

Pinduoduo focused China’s smaller cities and extra rural areas, the place shoppers are usually much less rich and extra cost-conscious, says JS Tan, an MIT graduate scholar who researches the Chinese language tech trade. Its signature function is “group shopping for”, which permits customers to arrange folks to make mass purchases instantly from producers at a steep low cost. As a result of Pinduoduo is closely built-in with WeChat, China’s high social media platform, it’s a snap for customers to collect up mates, household, and web strangers to order large batches of all the pieces from electronics to child formulation to groceries – one thing that grew to become a lifeline throughout China’s strict Covid lockdowns.

The corporate’s mannequin is analogous to Shein, the controversial Chinese language ultra-fast-fashion model that makes use of tight manufacturing networks to churn out fashionable garments to younger western patrons. “Like Shein, Pinduoduo mastered the availability facet by way of delivering merchandise at extremely low cost and extremely low price to clients,” Tan advised the Guardian. “I feel that’s actually going to be a part of their technique in coming to the US.”

However the firm’s fast progress has come at a value. “Pinduoduo is understood for its excessive additional time,” mentioned Li Qiang, a veteran labor activist and founding father of the non-profit China Labor Watch. “The competitors is extraordinarily intense, and the circumstances are a lot crueler than in America.”

Two Pinduoduo staff died inside a two-week interval from December 2020 to January 2021, igniting a nationwide scandal. The primary employee, 22-year-old Zhang Fei, died on 29 December, when she was heading residence round 1.30am after a sequence of extraordinarily lengthy shifts. The second employee, an engineer in his 20s, jumped to his demise on 9 January after abruptly asking for go away from the corporate and touring residence the identical day.

The controversy grew when days later, a Pinduoduo worker who referred to as himself Wang Taixu mentioned he had been fired by the corporate after posting a photograph of a colleague being taken into an ambulance after collapsing. Wang subsequently revealed a prolonged video on the video-sharing website Bilibili detailing labor abuses he’d witnessed on the firm; he alleged that some employees had been made to work as many as 380 hours a month, which the corporate denied.

A spokesperson mentioned on the time that it fired Wang not for posting the photograph of the employee, who the corporate mentioned had a “abdomen downside”, however for making “excessive feedback with apparent malice”. Pinduoduo didn’t instantly reply to a request from the Guardian to remark for this story.

Colin Huang, founding father of Pinduoduo, in 2017. {Photograph}: Bloomberg/Getty Photos

Wang additionally complained about extreme overcrowding in Pinduoduo’s workplaces, and a dire scarcity of bogs, a difficulty that attracted vital consideration in China. In some circumstances, there have been as few as eight lavatory stalls for a ground with over 1,000 employees, forcing employees to face in lengthy strains or sneak into neighboring buildings, based on Tan.

“The corporate got here up so rapidly and so they had been bringing on so many new staff that they discovered themselves in a scenario the place they had been cramming increasingly more employees into the identical ground with out altering the type of lodging that every constructing supported,” Tan mentioned.

The deaths and Wang’s video reignited a nationwide dialog over China’s “996” work tradition, wherein many white-collar industries require staff to work from 9am to 9pm, six days every week. Many social media customers referred to as for boycotts towards Pinduoduo, and native officers introduced investigations into the corporate. The corporate was additionally compelled to tug out as a sponsor of the Lunar New Yr Gala, the most-watched present on Chinese language tv. Pinduoduo “grew to become, at the very least in that second, the face of how brutal the 996 circumstances may be in tech”, mentioned Tan.

After years of breakneck enlargement, China’s tech sector lately hit a wall. Since late 2020 the federal government has pursued acrackdown on tech firms and their homeowners, and the prospects for progress at residence have dwindled. “These firms had been competing to seize all these new folks coming on-line, however at this level in China, we’ve crossed that billion consumer mark, and the oldsters who usually are not on-line – just like the aged or very younger – could not have large spending energy anyway,” Tan mentioned. On the entire, Chinese language households spend far lower than American households, relative to their nations’ GDPs.

That helps clarify why China’s tech companies are wanting overseas. Different Chinese language e-commerce giants, similar to Alibaba, Meituan, and have discovered success advertising and marketing to south-east Asia and Latin America, however Pinduoduo could also be impressed by the success of Chinese language firms similar to Shein and Bytedance – the guardian firm of TikTok – within the US.

The query is what sort of firm it’s going to be if it units up workplaces in the US. “I feel that for American tech employees, this undoubtedly isn’t factor,” mentioned Li. “By way of manufacturing prices, American firms haven’t any solution to compete with Pinduoduo. If Pinduoduo succeeds, it might take Chinese language-style labor practices and convey them to America.”

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