Better Health for All

PDD Holdings' international platform, Temu, faces severe and systematic product safety concerns, leading to its exclusion by an asset manager in Q4 2024.

Products sold on Temu have been found to contain illegal and/or toxic chemicals, defects causing electric shocks or fire hazards, and numerous items failed EU safety standards, including children's toys, cosmetics, and electric heaters. This widespread issue has led to regulatory investigations by the European Commission and complaints for breaches of the Digital Services Act. Temu's business model is also criticized for its 'addictive design,' potentially impacting user well-being, and its low prices may disproportionately affect vulnerable consumers with unsafe products. Pinduoduo, the company's China platform, has faced accusations of selling counterfeit goods, and in September 2024, updated rules to remove sellers of 'shoddy products.' However, Pinduoduo is investing US$1.5 billion in sustainable ag-tech to improve food safety, health, and nutrition, and is collaborating on a project to develop a faster, lower-cost method for testing pesticide residue in fresh produce, with a target completion of 2022 and commercialization one year later.

Fair Money & Economic Opportunity

PDD Holdings Inc. operates e-commerce platforms (Pinduoduo and Temu) and is not described as a financial institution offering lending, insurance, or deposit services to consumers.

The value 'Fair Money & Economic Opportunity' primarily evaluates financial institutions and their impact on financial inclusion. While the company promotes digital inclusion for smallholder farmers and supports poorer farmers in lower-tier areas through its e-commerce platforms, and offers training programs for farmers to become better business operators, these activities do not directly relate to the provision of financial products or services as defined by the KPIs. Therefore, there is no relevant evidence to score KPIs such as underserved_client_share, pricing_fairness, exploitative_fee_exposure, inclusion_initiatives, wealth_building_outcome, profit_reinvestment, financial_literacy_initiatives (in a financial services context), debt_burden_ratio, geographic_inclusion (for financial service access points), or product_simplicity (for financial products). Allegations of data collection and potential sharing with the Chinese government, as well as privacy violations, were made in a lawsuit against Temu, but this evidence pertains to unauthorized data practices rather than the provision of open-banking APIs or customer control over data portability, which is the focus of the data_accessibility KPI. The company was fined RMB1.5 million in March 2021 for unfair pricing conduct related to its online grocery businesses, but this does not pertain to lending practices or fair lending compliance.

Fair Pay & Worker Respect

PDD Holdings' subsidiary, Temu, faces an extremely high risk of forced labor in its supply chains, with the House Select Committee on the Chinese Communist Party reporting that Temu does not prohibit Xinjiang-sourced goods and lacks a meaningful compliance program.

The company has over 80,000 suppliers and relies on boilerplate terms and conditions to prohibit forced labor. Garment workers in Southeast Asia, supplying platforms like Temu, typically work without employment contracts. Additionally, two Pinduoduo employees died within a two-week period between December 2020 and January 2021, leading to local official investigations.

Fair Trade & Ethical Sourcing

PDD Holdings Inc. was excluded from Storebrand's portfolios in Q4 2024 due to risks related to product safety and forced labor.

The company has admitted it "does not expressly prohibit third-party sellers from selling products based on their origin in the Xinjiang Autonomous Region." US lawmakers warn of an "extremely high risk" that products sold on Temu have been made with forced labor, and an investigation into compliance with a 2021 US law barring the import of goods made using forced Uyghur labor is ongoing. The company does not conduct audits or reports on non-compliance with the United States UFLPA. Ultra Information Solutions found at least 10 items made or sold by businesses in Xinjiang available on Temu, where their company links and origins are obscured, indicating a lack of traceability. Temu lacks transparency about its suppliers and audit results. Germany's Federal Institute for Risk Assessment warned against jewelry containing high lead levels sold through platforms like Temu, and U.S.-based recalls highlighted dangerous toys posing choking hazards, indicating a high risk from materials.

Honest & Fair Business

No specific, concrete data points relevant to the 'Honest & Fair Business' value for PDD.US were found in the provided articles.

Therefore, no KPIs can be scored based on the available evidence.

Kind to Animals

The provided articles do not contain specific, concrete data points that align with the quantitative thresholds of the 'Kind to Animals' KPIs. While articles describe incidents where live animals were sold on Pinduoduo's platform via 'mystery boxes,' leading to harm and deaths, and that shipping live animals in this manner is illegal in China, these incidents do not map directly to the defined KPIs such as cruelty-free certification, alternative testing usage, humane certifications, or ethical input substitution percentages.

There is no evidence regarding the percentage of R&D budget invested in animal-free technologies, participation in animal-free R&D collaborations, or specific animal welfare policies. The company is noted to lack biodiversity-related protections against illegal online trade of plant and animal species, but this does not provide a measurable impact of conservation initiatives or a percentage of revenue funding such projects. Therefore, no KPIs can be scored based on the provided evidence.

Respect for Cultures & Communities

PDD Holdings has committed 100 billion RMB to a merchant support program and 10 billion RMB to a fee reduction initiative.

These, along with logistics support for remote regions and agricultural zones, represent a significant investment in local community development. The 110 billion RMB combined commitment is approximately 27.93% of the company's 2024 total revenue of RMB393,836.1 million. The company has no reported cultural appropriation incidents directly attributed to it. PDD Holdings established a Merchant's Rights Protection Committee in January 2025 to formalize communication channels and collect feedback from merchants, and has rolled out upgrades to an upsell survey system and introduced improvements for dispute resolutions. The company's quality merchant support program expanded its reach across agricultural and industrial regions known for specialties, which could contribute to cultural preservation. The company supports a large number of high-quality merchants and brands across 1,000 agricultural regions and industrial zones. PDD Holdings faced social media backlash due to the death of a staffer and an engineer's suicide, suggesting issues with its social license to operate. In response to the staffer's death, Pinduoduo expressed sympathy and launched a counseling service for employees, but made no mention of its working practices.

Safe & Smart Tech

The Pinduoduo app, operated by PDD Holdings, was found to contain "invasive malware" that exploited Android vulnerabilities to gain unauthorized access to user data, including private messages, and control devices.

This malware was found in version 6.49.0, released in late February, and affected over 750 million monthly active users. A team of approximately 100 engineers was dedicated to exploiting around 50 Android system vulnerabilities. Google suspended the Pinduoduo app from its Play Store in March 2023 due to this malware. Experts described it as "the most dangerous malware" ever found in a mainstream app. Temu, another PDD Holdings app, is facing lawsuits, including one from the Arkansas Attorney General in June 2024, alleging violations of privacy laws due to questionable data collection practices, including camera access, location, and contacts, even overriding user privacy settings. An Illinois class action lawsuit from November 2023 also alleges data security failures and unauthorized data collection by Temu, allowing hackers to steal personal and financial information. Temu is alleged to collect far more data than necessary, including precise location tracking, camera and microphone access, and biometric data. These practices are alleged to bypass phone privacy settings, leaving individuals powerless to control their information. Pinduoduo was also accused of monitoring customers and competitors to increase sales. PDD's Pinduoduo promised to address issues related to the misuse of algorithms and is "actively building a healthier ecosystem" to prevent "Big Data-enabled price discrimination" following a three-month official campaign launched late in November to address "typical issues with algorithms" on online platforms.

Zero Waste & Sustainable Products

The company integrates circular design principles through its Consumer-to-Manufacturer (C2M) model, which aims to reduce wastage and promote efficiency by streamlining supply chains and compressing the new product development process by 50%.

PDD Holdings has implemented several waste reduction initiatives, including the C2M model, an e-waybill system launched in Q1 2019 to eliminate paper waybills, and a pilot under the Duo Duo Farm initiative that resulted in 15% less fertilizer use for orange trees.