What: Chinese e-commerce giants face intensifying competition and slowing consumer spending.

Why it is important: The situation reflects broader economic concerns in China, potentially impacting global retail trends and supply chains.

Pinduoduo, China's third-largest e-commerce firm, recently experienced a significant market setback, with its share price plummeting by nearly 30% after reporting lower-than-expected sales. This volatility reflects broader challenges in China's e-commerce sector, including weakening consumer spending and intensifying competition. The annual "618" shopping festival saw its first-ever decline in sales since its inception in 2010, despite extended promotional periods. Industry analysts project a continued slowdown in e-commerce growth, with annual revenue growth expected to fall from 8.3% in 2023 to 6.5% by 2028.

The competitive landscape has become increasingly fierce, with e-commerce platforms engaging in aggressive price wars and offering substantial discounts to attract cost-conscious consumers. This trend has been further intensified by the entry of short video apps like Douyin and Xiaohongshu into the e-commerce space. Additionally, some e-commerce companies face backlash from merchants over penalty practices, leading to protests and commitments to reduce fees. In response to these challenges, companies like Pinduoduo are exploring international expansion. However, this strategy faces its hurdles, including competition from established players like Amazon in markets such as the United States.

Pinduoduo, China’s e-commerce star, suffers a blow