Chinese online retailer Pinduoduo’s penchant for cutting prices has made it one of the fastest-growing apps in the country and reflects broader economic woes. When Lin Yunyun started selling diapers on Pinduoduo two years ago, she faced constant pressure to follow price changes. The platform automatically alerted her when competitors were offering lower prices, forcing her to lower prices and threatening her profits.
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Pinduoduo is a leading symbol of China’s deflation, luring shoppers with its discounts. The app is fueling what it calls “low-spending,” encouraging frugality among Chinese consumers amid a housing crisis and labor market instability. Consumers are spending less and saving more, driving down prices and squeezing profits.
