Nongfu Spring founder Zhong Shanshan has reignited debate over China’s e-commerce model, warning that platform-driven price competition is putting traditional distributors and offline retailers under growing pressure.
China’s e-commerce boom has transformed the country’s retail landscape, but Nongfu Spring founder Zhong Shanshan argues that the shift has come at a cost for traditional commerce.
In an interview with CCTV Finance, Zhong criticised the growing influence of e-commerce platforms over pricing, distribution and access to consumers. He argued that digital platforms have increasingly replaced the role once played by traditional distributors, while algorithms and platform-based pricing have intensified competition among businesses.
E-Commerce’s Growing Influence
Traditional distribution networks historically connected manufacturers, wholesalers, retailers and consumers. According to Zhong, these networks operated through established relationships and relatively predictable commercial arrangements.
The expansion of e-commerce has disrupted that structure. Online platforms now provide brands with direct access to consumers while controlling key elements of the digital shopping experience, including traffic allocation, product visibility and pricing mechanisms.
Zhong believes this has weakened the position of traditional distributors, many of which have struggled to remain competitive as consumers increasingly shift their spending online.
The Cost of Price Competition
At the centre of Zhong’s criticism is the growing emphasis on low prices.
China’s major e-commerce platforms have increasingly relied on discounts, promotions and price-based competition to attract consumers. While this approach can increase affordability and drive transaction volumes, it can also squeeze margins for merchants and suppliers.
For consumer brands, the challenge is particularly significant. Companies must compete for visibility and sales while protecting margins, maintaining product quality and avoiding excessive discounting that could weaken long-term brand value.
Zhong’s comments therefore reflect a broader concern within China’s retail sector: whether increasingly aggressive price competition can remain sustainable for businesses across the supply chain.
Offline Retail Faces a New Reality
Zhong also pointed to changes in consumer behaviour caused by the rise of mobile commerce.
Physical retail has traditionally benefited from spontaneous purchases and consumers discovering products while visiting stores and shopping districts. Online shopping, by contrast, increasingly directs consumers toward products through search, recommendations and algorithms.
This shift has fundamentally changed how consumers discover and purchase goods – and reduced the role of physical retailers in the process.
A Wider Debate for E-Commerce
Zhong’s remarks come at a time when China’s e-commerce industry is entering a more mature phase. The sector is no longer simply focused on moving consumers from physical stores to online platforms. Competition is now centred on pricing, logistics, livestreaming commerce, social shopping, artificial intelligence and increasingly sophisticated consumer data.
The debate highlighted by Zhong raises a broader question for the industry: how can e-commerce deliver greater efficiency and value for consumers without creating unsustainable pressure across the retail ecosystem?
China’s experience demonstrates both the transformative power of digital commerce and the disruption it can create for established business models. As platforms continue to shape how products are priced, promoted and distributed, the relationship between e-commerce and traditional commerce will remain an important issue for the global retail industry.
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