Shares of e-commerce app Pinduoduo (NASDAQ: PDD) on Monday dropped more than 6% after a local government started to probe the company for the death of a young female worker.
Pinduoduo confirmed with KrASIA in a written statement that the employee, which the company identified as “Fei,” passed away on the early morning of December 29, shortly after a sudden collapse when travelling home with her colleagues at 1:30 a.m.
The death of the female, who was born in 1998 and joined Pinduoduo in July 2019, was first exposed and lamented by netizens on the question-and-answer platform Zhihu on Sunday.
The company answered promptly. “Look at those grass-root people, who are not earning money at the sake of life? I do not think this is the problem of capital, but a problem of the society,” Pinduoduo’s verified Zhihu account responded on Monday morning.
“This is an era in which you need to elbow your way at the cost of your life,” it went on. “You can choose an easy life, but you need to sustain the results of your choice. People can actually control their own efforts. We all can.”
The post was soon deleted but screenshots of it drew wide attention among critics of the overtime work culture that is prevalent among Chinese internet companies and Pinduoduo’s corporate values.
Pinduoduo initially denied that the post came from the company itself, prompting Zhihu to assert that its strict procedure of user verification means that there can be no doubt about the origin.
The raising e-commerce star later told KrASIA that the post was actually from an employee of one of its suppliers, who allegedly misused Pinduoduo’s account before deleting it again after realizing the mistake.
Probe in Shanghai
“Pinduoduo mishandled the matter,” an industry analyst told KrASIA, adding that, at this point of time, it is still hard to determine how it will affect the company. Meanwhile, the local government in Shanghai has started a probe into Pinduoduo related to its working hours.
“Only if state-owned media, especially People’s Daily and the broadcaster CCTV, start to comment on Pinduoduo’s labor issues and the central government is taking action, the tragedy could have a material impact,” the analyst further explained. “Otherwise, there will be no impact at all.” In an editorial on Tuesday, state news agency Xinhua already criticized the “abnormal overtime culture” at the company.
It is not the first time that internet companies are attacked for their overwork culture. Chinese SaaS vendor Youzan, which counts Tencent and Baidu among its investors, was criticized when its founder Zhu Ning, who also goes by the name of Bai Ya, demanded “996 working hours” (9 a.m. to 9 p.m. during 6 days a week), but the Hangzhou local government, which investigated the company later, said it wasn’t running such a schedule.
Alibaba founder Jack Ma later advocated for the 996 work schedule. People’s Daily reacted by asking if success gained on the sake of health is worthwhile, pleading companies to respect the Chinese law to protect its workers’ legal rights. Nonetheless, overtime is still prevailing in the country.