Key Takeaways:#
- China’s booming tech industry has epitomized the country’s hustle culture, and a “996” work schedule — referring to a 9 a.m. to 9 p.m. workday and a six-day workweek — is commonplace in most Chinese internet companies.
- After international media outlets Bloomberg, Quartz, and CNN reported the news of two Pinduoduo workplace deaths, the Nasdaq-listed company’s shares dropped from 172.31 to 161.38 by January 13.
- Pinduoduo’s older users in lower-tier cities should be sealed off from any backlash from the incidents. But young shoppers who are sensitive to social issues could become discouraged from using the site.
After the deaths of two employees on December 29, 2020, and January 7, 2021, the Chinese e-commerce giant Pinduoduo is being criticized for its unethical workplace culture.
Netizen accusations about cruel working conditions have erupted ever since the first incident, which was reported on January 3. On January 4, an official account under the name of “Pinduoduo” on Zhihu (the Chinese version of the Western question-and-answer platform Quora) responded to the accusations, stating that Chinese society was responsible for allowing the lower classes to risk their lives for wages and the sake of corporate earnings.
The user deleted the comment within one minute, and Pinduoduo declared that the post was uploaded by an employee from the company’s marketing partners and did not represent its official position. Since then, the Weibo hashtag #ExplanationOfPinduoduoEmployeeSuddenDeath has received 630 million views.
Yet, the company’s PR crisis was elevated even further on January 7 when a video, posted by a previous software engineer named Wang (with the nickname “Taixu”), went viral on social media. In the 15-minute video, Wang described how Pinduoduo broke his contract after he posted a photo on Maimai (a China-based career and social-networking platform) of an ambulance taking away another company employee. It also recently came to light that the company had installed a rule at its Shanghai headquarters that certain staff members were required to work a minimum of 300 hours a month.
China’s booming tech industry has epitomized the country’s hustle culture since its origins. The “996” work schedule — referring to a 9 a.m. to 9 p.m. workday and a six-day workweek — is a given in most Chinese internet companies. On Weibo, users called for a boycott of Pinduoduo, vowing to block links to the platform’s sales deals (the primary way the platform reaches a wider audience).
On January 12, Wang told the state-run press agency Xinhua News that he did not regret posting the photo. This exclusive interview has received over 2.5 million views on Weibo within two days.
Despite the public outrage, Pinduoduo’s stocks had remained resilient, as of January 11. But after international media outlets Bloomberg, Quartz, and CNN reported the news, the Nasdaq-listed company’s shares dropped from 172.31 to 161.38 by January 13.
Pinduoduo’s PR crisis has impacted its investors, but what about its user base? The platform’s average monthly active users jumped by 50 percent to 643 million during the third quarter (ending on September 30), according to its 2020 third-quarter results. Pinduoduo’s older users are made up of price-sensitive demographics in lower-tier cities, who seem to be sealed off from the backlash against the firm. However, young shoppers who are sensitive to social issues could become discouraged from entering into the site’s social buying programs due to the controversy.
But more importantly, the mainstream media’s continuing reports on the Pinduoduo tragedies have convinced authorities that they need to control the country’s tech giants by putting them under surveillance.