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China tech

Pinduoduo worker death in China sparks criticism of job conditions

Stock falls as users delete app in protest against tech industry's labor culture

Pinduoduo's Nasdaq-listed shares fell 6.1% on Monday after users began deleting its shopping app in protest against its culture of overwork.    © Reuters

HONG KONG -- The sudden death of a young employee at online retailer Pinduoduo has drawn sharp criticism over China's work culture, prompting a boycott of the e-commerce company's widely used app and sending its shares tumbling in New York.

The 22-year-old female worker had collapsed in the street at 1:30 a.m. on Dec. 29 while she was walking home with colleagues and died later in hospital, Pinduoduo confirmed in a statement this week.

While there is no direct evidence that the employee's death was related to overwork, the incident sparked heated discussion over China's notorious work culture in the technology industry. Known as 996, in which employees work from 9 a.m. to 9 p.m., six days a week, the practice is commonly found among China's tech companies and is integral to the sector's rapid rise over the past decade.

The Beijing Youth Daily reported that the labor rights protection department in Shanghai, where Pinduoduo is based, has launched a probe into the company and will review the working conditions of its staff.

Chinese state-run media also spoke up. In an apparent response to the news, the state-run Xinhua New Agency commented on its official Weibo page: "There are many definitions for working hard, but it is never about sacrificing life for money." It urged employers to protect the rights of hardworking employees.

Meanwhile, some customers have begun deleting the company's shopping app as a way to boycott its alleged abuse of workers. Pinduoduo's Nasdaq-listed shares tumbled 6.1% on Monday, closing at $166.78.

The developments come at a time when Pinduoduo and other Chinese internet companies are aggressively expanding into new areas beyond traditional e-commerce. The 22-year-old employee was part of Pinduoduo's community group-buying business team in the Xinjiang Uyghur Autonomous Region, Caixin reported.

The group-buying service, in which neighbors purchase groceries and fresh produce in bulk at discounted prices, became popular during the coronavirus pandemic and is now one of the hottest battleground areas in e-commerce. In addition to Pinduoduo, Alibaba Group Holding, Tencent Holdings, Meituan, JD.com and ride-hailing company Didi Chuxing have all rolled out the service or invested in startups in the segment.

Pinduoduo currently is leading the competition. Five months after it unveiled its online grocery shopping platform, Duo Duo Maicai, in August, Pinduoduo has expanded into more than 200 cities in China.

The initial success of Pinduoduo's new business, along with the overall e-commerce boom during the COVID-19 pandemic, helped to quadruple the five-year-old company's market capitalization to $170 billion by the end of December. Its 40-year-old founder, Colin Huang, also has overtaken Alibaba's Jack Ma and Tencent's Pony Ma to become China's second-richest person, according to Forbes.

The cutthroat competition, however, has added to the pressure on current employees, who in many cases must work long hours to fulfill their job responsibilities.

Several users identified as Pinduoduo employees on Maimai, the Chinese equivalent of LinkedIn, have complained about the long working hours at the company. They said employees in some departments are required to work at least 300 hours a month to fulfill the requirement of company appraisal, and the newly launched Duo Duo Maicai is among the worst in terms of the workload.

Last week's death has sparked heated discussion on Chinese social media and many have pledged to boycott Pinduoduo.

"Pinduoduo is generous in giving out subsidies, but I decided to uninstall the app," wrote one user on Weibo, a Chinese Twitter-like website. "People who work there, please take care."

Another user said: "I feel shameful using the app," and called Pinduoduo a "sweatshop."

Pinduoduo is not the only company facing criticism over labor abuse in the tech industry. In 2019, tech workers in China took to Microsoft's GitHub platform to expose companies in which employees were required to work overtime. Huawei Technologies, Alibaba, Tencent and JD.com are among those on their list.

More than half of China's white-collar workers from the ages of 18 to 35 worked more than 40 hours a week, according to a 2020 research paper published in the academic journal China Youth Study, based on 2,171 responses collected in 2016. About 40% of those who worked overtime did not get additional compensation, and the figure for workers in the tech and knowledge-based industries is 96.1% higher than average, the study said.

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