One of the newcomers in the Chinese e-commerce space, Pinduoduo has decided to bring imported items to smaller towns and rural areas of China. Pinduoduo is the latest name to enter the Chinese e-commerce space which is dominated by Alibaba and JD.com, according to a report by TechCrunch.
The three year old company which is backed by Tencent is looking for importers to set up shops on its marketplace. The business is also known for selling cheap, counterfeit products which initially became an instant hit with customers from less prosperous parts of China. Tencent’s popular chat messenger, WeChat has played a very important role in the rise of Pinduoduo with its innovative and viral marketing schemes and this facility is not available to its rivals like Alibaba.
Pinduoduo’s social group-buying model has really worked wonders for this startup and in a very short span of time the company has garnered a user base of 232 million, which might be considereda fraction of Alibaba’s 700 million user base but the fact that can’t be denied is that the company is growing at a phenomenal rate of over 200 percent per year and it has already eclipsed JD.com in terms of market penetration.
The report further adds that during last year, Pinduoduo was installed on 27.4 percent of all mobile devices in China, which placed it marginally ahead of JD.com which stood at 23.9 percent and behind Alibaba’s Taobao at 52.5 percent.
China’s cross-border business is growing at a rapid rate and the demand for imported goods is also growing at a rapid rate. The lucrative sector generated nearly 9 trillion yuan ($1.34 trillion) last year and this speaks volumes of the size of this upcoming market.
The cost of taking up Alibaba and JD.com is big and this became more evident from the fact that PDD recently announced that it is planning raise $1 billion, just six months after the company raised $1.63 billion initial public offering. It remains to be seen whether Pinduoduo will be able to use cross-border business to replicate direct sales and will it be able to make a dent in the prospects of industry giants.