Pinduoduo, founded by a former Google engineer, is a mix of social buying and heavily discounted products popular in lower-tier cities and rural areas that make up 73% of China’s population. While Pinduoduo is known for discounting and counterfeits, their growth and the new platform are worth watching.
“They are hoping to establish a parallel [platform] with a higher market position, which would be more suitable for brands to invest in,” Marie Tulloch, account director at Emerging Communications, told Vogue Business. “But they would really have to crack down on fake products and set up a decent strategy in terms of IP protection.” The company has previously acknowledged it has more work to do and pledged to put better anti-counterfeiting measures in place.
- Pinduoduo sold RMB471.6 billion ($68.6 billion) of goods in 2018.
- Pinduoduo has 77.5 million daily active users according to data firm Jiguang—more than JD (37.3 million) but still far behind Alibaba’s Taobao (209 million).
- The company’s consumer base resides in the Chinese countryside and lower-tier cities.
- Rural customers spent RMB1.37 trillion on e-commerce in 2018, a 30 percent year-on-year increase, according to the China Internet Network Information Center.
- The company saw an 87% increase in annual spending per active buyer in the first quarter of 2019.
- In August 2018 the business launched a “Branded Goods Pavilion” featuring more than 700 brands, including Nestlé, Yamaha, and Hong Kong jeweler Chow Tai Fook.
- The company recently invested RMB1.5 billion in 100 Shanghai heritage brands, including cosmetics company Jahwa and footwear brand Warrior.
Read the full story in Vogue Business.
Photo: Zhang Kaiyv via Unsplash