How E-Commerce Is Making China’s Deflation Worse

Published On Oct 7, 2024, 12:01 AM

Pinduoduo, one of China's fastest-growing e-commerce platforms, has gained popularity by aggressively lowering prices, contributing to a broader deflationary trend in the Chinese economy. The company's strategy involves persistent price-cutting reminders to sellers, which has led to a phenomenon known as 'downgraded spending' among consumers who prioritize discounts. This trend is exacerbated by a real estate crisis and a weak labor market, making Chinese consumers more cautious with their spending. While the government hints at fiscal measures to boost consumer spending, no specific plans have been disclosed yet.