"Temu's Ultra-Low Price Offensive Ruined Everything"… China's Richest Tycoon Issues Stern Criticism

"Authorities' Negligence in Regulatory Duties" Candid Remarks

Zhong Shanshan, one of China's richest tycoons and the founder of the bottled water company Nongfu Spring, has openly criticized the ultra-low price strategies of online shopping platforms.

Chairman of Zhongshan Nongfu Spring. Screenshot from Nongfu Spring website

On the 22nd (local time), US CNN and Chinese internet media Pengpai reported that Zhong Shanshan criticized the low-price policies of the e-commerce company PDD Holdings at an event in Ganzhou, Jiangxi Province, on the 19th, saying they harm Chinese industries.

Chairman Zhong said, "Internet platforms have destroyed our pricing system. Especially the pricing system of the e-commerce company Pinduoduo has caused great harm to Chinese brands and industries," adding, "This is not a case of the bad driving out the good, but rather it has become the direction of the entire industry, with price becoming the industry's goal." PDD Holdings operates the low-price focused e-commerce company Pinduoduo and the overseas shopping app Temu.

Furthermore, Chairman Zhong criticized the Chinese authorities for not making sufficient efforts to curb this ultra-low price offensive. He stated, "The government is not intervening in this industry trend," and "I think the government has neglected its duties." CNN explained that although Zhong Shanshan's remarks were barely reported by Chinese state media, transcripts and videos were shared on other news sites.

It is very rare for Chinese entrepreneurs to publicly criticize the government. Some are concerned about Zhong Shanshan's safety. Previously, Alibaba founder Jack Ma strongly criticized Chinese financial regulators for overly conservative supervisory policies at a public event in October 2020, after which the planned November IPO of Alibaba's Ant Group was abruptly canceled. This was followed by a major investigation of Ant Group by financial authorities, causing significant repercussions. Foreign media added that other entrepreneurs who made critical remarks like Jack Ma often faced negative consequences.

Meanwhile, in March, Nongfu Spring, known as China's "national bottled water," was treated as a traitor locally. This was due to the revelation that Zhong Shanshan's son holds US citizenship and because the company's beverages featured Japanese-style illustrations. As a result, in August, Zhong Shanshan temporarily lost his position as China's richest person to Huang Zheng, founder of PDD Holdings, in Bloomberg's billionaire rankings.