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Business Standard
6 days ago
- Business
- Business Standard
No more 70-hour work weeks? China clamps down on 996 overtime culture
The 70-hour workweek debate has reignited—this time in China, where the government is cracking down on the '996' work culture, recently declared illegal by the nation's top court. From tech giants to manufacturing powerhouses, several major Chinese firms have started telling employees to clock out earlier, The Economist reported last month. Midea, one of the country's leading appliance makers, now sends staff home by 6:20 pm. DJI, a drone manufacturer long associated with late hours, has begun clearing offices by 9 pm. These shifts signal a quiet, state-backed effort to dismantle the '996' culture that has come to define white-collar life in China's tech sector. Understanding China's 996 work culture and why it is controversial The '996 work culture' refers to a work schedule common in some Chinese tech companies and startups, where employees are expected to work from 9 am to 9 pm, six days a week. This results in a 72-hour work week, which is well beyond China's legal limit. Why tech firms in China pushed the 70-hour work week model The 996 work culture became a norm in China's tech industry, especially after Alibaba founder Jack Ma famously called it a 'blessing' in 2019, adding, 'If you want to join Alibaba, you need to be prepared to work 12 hours a day, otherwise why even bother joining?' A leaked internal letter from 2019 showed Richard Liu, founder of writing, 'Slackers are not my brothers!' He went on to criticise 'those who spend their days drinking coffee and pretending to work' and praised 'brothers who fight together and bleed together'. At the time, a job at Alibaba, Tencent, or Baidu signified prestige and prosperity, even if it came at the cost of personal time, pushing workers to quietly tolerate the long working hours. Chinese tech workers push back against exploitative work norms But soon after, tech workers, many of them young, began pushing back, criticising the culture as exploitative and unsustainable on platforms like GitHub. China's young workers join 'Bai Lan' and 'Tang Ping' anti-hustle movements Workers began mocking the system with phrases like '007'—working all day, every day. Many young Chinese started to join the 'Bai Lan' (let it rot) and 'Tang Ping' (lie flat) movements, rejecting ambition altogether in favour of low-key, low-stress lifestyles. This was further fuelled by the issue that despite working long hours, people were still struggling to afford housing, marriage, or a better quality of life. Skyrocketing property prices and living expenses made it especially difficult for Chinese youth to achieve financial security. Overwork, health risks and tragic deaths raise alarm in China and beyond Health has also taken a toll, with multiple reports of young workers in their twenties collapsing and dying after prolonged periods of overwork. While companies have denied any direct link to working hours, the incidents have fuelled speculation around chronic exhaustion. This is not unsimilar to the case of 26-year-old chartered accountant Anna Sebastian Perayil, who died just months after joining Ernst & Young in Pune. Her parents condemned the firm's 'glorification of overwork' and lack of employee support for her daughter's death. What China's labour law says about overtime and the 996 schedule China's Labour Law limits working hours to 8 hours per day and 40 per week, allowing up to 36 hours of overtime per month. In 2021, the Supreme People's Court and the Ministry of Human Resources ruled the 996 schedule illegal, citing labour disputes where workers had died or been wrongfully dismissed over overtime. How Chinese firms bypass 996 bans using flexible work labels Yet enforcement has been sporadic. Many companies simply rebranded 996 as 'big week/small week' or used flexible-hour loopholes approved by local labour bureaus. Backlash forces resignations and sparks debate on work-life balance In 2024, Baidu's head of communications triggered a social media firestorm by declaring it wasn't her responsibility if employees' personal lives were destroyed by work. 'I'm not their mother,' she said. Days later, she resigned amid backlash. Global tech leaders defend extreme work hours as path to success Tech leaders across the globe have long championed a 'sacrifice now, succeed later' ethos, portraying extreme work hours as a prerequisite for greatness. Tech billionaire Elon Musk in 2018 famously said, 'Nobody ever changed the world on 40 hours a week,' urging followers to put in 80 to 100 hours to 'improve the odds of success.' Indian leaders echo long work hour sentiment amid productivity debate In India, Infosys founder Narayana Murthy sparked controversy by suggesting young people should work 70 hours a week to boost national productivity, a sentiment later echoed by several leaders. And while many have spoken out against hustle culture and toxic workplaces, deep-rooted cultural and economic forces continue to favour long hours with the promise of future rewards. Workers rarely challenge employers on overtime, fearing job loss or missed promotions. The problem is even more prevalent in the informal sector, with gig workers and service staff remaining overworked and underprotected. Younger workers in China and India reject hustle culture norms A younger generation of Chinese workers is increasingly rejecting the old trade-off of money for misery. While ending a deeply rooted cultural trend may be difficult, the fact that Beijing is even acknowledging the problem is significant. In India too, growing pushback against burnout culture suggests that younger professionals are beginning to question whether success should come at the cost of health and personal time.
Business Times
22-05-2025
- Business
- Business Times
How JD.com intends to unseat China's takeout king
WHEN a young Beijing resident opened his front door to grab his takeout meal in April, he was shocked to see a billionaire on his doorstep. Richard Liu, the founder of e-commerce giant had just scooted through the Chinese capital's streets to personally deliver the meal as well as a clear message to the country's dominant takeout platforms — is going to shake things up. In the cutthroat world of internet platforms, friends can quickly turn into rivals. During a dinner with other top tech CEOs, Liu said to Wang Xing of Meituan, the country's dominant food delivery platform: 'Retail doesn't belong just to me or – anyone can do it. I have no right to complain. The same goes for food delivery.' With those words, he directly challenged Meituan's grip on China's US$82 billion food delivery market. Both players now promise to deliver orders within 30 minutes for distances up to 5 km, taking instant retail competition to new levels. Liu's publicity stunt marked aggressive entry into the business. Since the launch of JD Takeaway in February, the e-commerce giant has been courting merchants with zero-commission deals, winning over delivery riders by offering a comprehensive social security package, and attracting consumers through discount vouchers. In April, it announced a 10 billion yuan (S$1.82 billion) campaign to subsidise consumers and merchants. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up JD Takeaway's orders have grown so rapidly that the app once collapsed during peak lunch hours. Forty days after launch, daily orders exceeded 1 million. A little more than two months later, orders exceeded 10 million. Meituan – which receives an estimated 60 million orders each day, over 60 per cent of market share – was forced to respond. The same day announced it would make social security payments for its riders, Meituan also promised similar benefits for its full-time and regular part-time delivery riders starting in the second quarter. It also followed by promising 10 billion yuan to help restaurants. To gain public support, targeted two major issues that have long plagued the industry: violations of delivery riders' labour rights and the controversial 'choose one of two' practice, where platforms force merchants to exclusively use their services. In 2021, Meituan was fined 3.4 billion yuan for implementing such exclusivity requirements. Tensions between the two rivals intensified in April. Without specifically naming competitors, condemned the imposition of 'choose one of two' on delivery riders. On the same day, Meituan fired back with a statement accusing a rival of 'spreading rumors to attract online attention', without naming In the same month, Liu also criticised Meituan's high commission rates, claiming that food delivery 'net profit will not exceed 5 per cent', compared to Meituan's current rates of 6 per cent to 8 per cent. The heated rivalry between the duo – representing the most prominent head-to-head clash in China's tech sector in recent years – comes at a time when the whole industry is downsizing. It has sparked concerns about the companies' future growth and profitability, with both of their stock prices falling by about a quarter since mid-March. Seeking growth breakthroughs Market analysts saw move into takeout as a sign of its urgent search for new growth. The company's main e-commerce business weakened after becoming entangled in price wars during 2023. It has fallen to fourth place in China's domestic e-commerce market in terms of gross merchandise value, trailing Alibaba's Taobao and Tmall Group, discount platform Pinduoduo and ByteDance's Douyin. In 2023, revenue growth dropped to 3.7 per cent, from 9.9 per cent in the previous year. In 2024 annual revenue growth recovered to 6.8 per cent, benefiting from the government's trade-in policy for household appliances. ' benefited from home appliance subsidies in the second half of 2024, but this boost is not sustainable,' a senior executive from a non-e-commerce division told Caixin. sees food delivery as a strategic opportunity that meets Liu's internal criteria for new ventures: clear market pain points, operational feasibility, and financial sustainability. A person close to investor relations department said Liu emphasized these three points during internal training sessions. The company believes the food delivery sector has relatively fewer competitors and high commissions, making the opportunity attractive. It also views the move as feasible given its decade-long experience in instant retail. Lastly, the investment is seen as financially manageable, supporting the decision to expand into this space, according to the person's analysis. hopes to use high-frequency food delivery services to drive traffic to its lower-frequency e-commerce business. 'Instant retail is a natural extension of our core retail business, and food delivery is one of the high-frequency services within instant retail that can enrich user scenarios and enhance user stickiness and activity,' said Xu Ran, the CEO of and JD Retail, in a March conference call. Meanwhile, Meituan is attempting to expand from high-frequency food delivery traffic into non-food categories to squeeze more value out of its traffic. Competing on speed In April, Meituan responded to foray onto its turf with its instant retail brand 'Meituan Instashopping' that offers goods ranging from groceries and beverages to electronic and skincare products, with an official claim of an average 30-minute delivery time to directly challenge next-day delivery. In response, announced its instant delivery service for a wide range of goods including fashion items, cosmetics, electronic products and medicine, boasting delivery in less than 30 minutes. Meituan does not see JD Takeaway as a threat as its 'order volume isn't seen as large enough,' a source familiar with the food delivery giant told Caixin. 'The counterattack is focused on the instant shopping element.' Instant retail represents a larger market than food delivery. According to the Ministry of Commerce, the instant retail market will grow by 29 per cent annually to exceed 2 trillion yuan by 2030. The key to Meituan Instashopping's supply and order growth is its 'flash warehouses' – small storage spaces placed in neighbourhoods. The company plans to set up 100,000 of them by the end of 2027. This model cuts costs by choosing cheaper store locations and only stocking the best-selling items, according to TF Securities analysts. Wang Puzhong, the CEO of Meituan's core local commerce business, said in April that Meituan now receives over 18 million non-food delivery orders daily and vowed to 'sweep those oversized, inefficient warehouse-delivery systems into the dustbin of history'. ' faces challenges in all four aspects: more, faster, better, cheaper,' an internet industry insider told Caixin, explaining that it cannot match Taobao and Tmall in variety or Pinduoduo in pricing, while its logistics business is being challenged by Meituan's Instashopping in speed. High-risk move? China's food delivery market has stabilised following price wars. According to 2024 data from Bocom International, Meituan has a 65 per cent market share, while Alibaba's holds 33 per cent, leaving all other platforms combined with just 2 per cent of the market. Market penetration has largely plateaued, leaving limited room for further user growth. SDIC Securities reported in April that expansion has notably slowed, with food delivery consistently accounting for around 25 per cent of total restaurant sales over the past three years. An analyst from an international hedge fund emphasized that for to establish a sustainable food delivery business, it must achieve significant order volumes to be profitable, and delivery algorithms require substantial data to optimize effectively. 'Once subsidies end, companies compete on operations, supply, and fulfillment efficiency,' a mid-level executive at told Caixin. 'Currently, supply focuses on chain restaurants, making it difficult to expand into the small restaurant segment without dedicated field teams.' For however, profitability may not be the sole success metric for its food delivery venture. The executive noted that even if traffic and orders decline, an increase in app daily active users would justify the investment from a medium-to-long-term strategic perspective. There appears to be a boost in engagement on app since its food delivery launch. Daily active users rose from 115 million the day the service came online on Feb 11 to 151 million by April 26, peaking at 160 million on April 22 amid media attention and founder Liu's delivery stunt, according to data from QuestMobile. Average daily usage time and app opens per user also saw modest increases during the period. The person close to investor relations department similarly indicated that achieving tens of millions of daily food delivery orders would not, in isolation, constitute success. The more critical factor is whether the food delivery service generates spillover effects that boost sales on JD's main platform. 'Platform companies invariably maintain a portfolio that includes both profitable and unprofitable business lines, as well as high-traffic and low-traffic segments,' the person added. CAIXIN GLOBAL
