Are Cheap Pinduoduo Purchases Making Us Poorer?

Are Cheap Online Purchases Making Us Poorer?

We love a bargain. 

Why pay $20 in a shop when the same-looking item costs $5 on Pinduoduo, Taobao, Temu or another overseas platform?

We save $15. Good deal.

But there is a bigger question:

We saved $15—but what did our nation lose?

When $20 is spent at a local business, that money doesn't stop at the cashier. Part becomes an employee's salary. Part pays rent, delivery companies, accountants, cleaners, suppliers and other businesses. These people spend the money again.

Money moves. Money creates more economic activity.

When more of our purchases go directly overseas, however, much less of that money circulates within Singapore.

One purchase means almost nothing.

Multiply it by millions of consumers, billions of purchases and many years, and something changes.

Local retailers lose sales. Margins shrink. Shops close. Jobs disappear. Wages come under pressure.

Then people have less money and naturally search for even cheaper products.

Cheap → Lower profits → Fewer jobs → Lower purchasing power → Even greater demand for cheap.

China itself provides an important warning.

China's fierce e-commerce competition has produced what policymakers increasingly call “involutionary competition”—companies constantly cutting prices, sacrificing margins and fighting simply to survive.

Chinese authorities have consequently been trying to curb destructive price competition and “low-price, low-quality competition.”

Europe and the United States have also changed rules governing enormous flows of ultra-low-value overseas parcels.

So the issue isn't simply Singapore versus China.

Nor should Singapore try to stop online shopping.

Cheap imports benefit consumers, especially families watching every dollar. Competition also forces Singapore businesses to improve.

The real question is:

How do we enjoy cheap global products without hollowing out our own economic ecosystem?

The answer has three parts.

First, Fairness. Overseas and Singapore businesses should compete under comparable standards for taxes, product safety and consumer protection.

Second, Transformation. Singapore businesses cannot beat Pinduoduo simply by becoming cheaper. They must compete through service, expertise, trust, speed, customisation and experiences that overseas platforms cannot easily provide.

Third, Conscious Consumption.

We don't have to “Buy Singapore” blindly.

But perhaps before pressing BUY, ask two questions:

How much money am I saving?

And:

What will my money create?

Because money isn't merely something we possess.

Money moves.

Every dollar we spend becomes somebody else's income, salary, business opportunity or investment.

This is where Love Intelligence—爱的智慧—can also apply to money.

Care about where our money goes.

Have the courage to create value instead of competing only on price.

Understand our connection with the economic community around us.

Don't just move money.

Move money with Love Intelligence—so that the money we spend today helps create the wealth we need tomorrow.