Pinduoduo To Subsidize Another 500 Million On Brand Products

Pinduoduo recently announced another subsidy of RMB 500 million (USD 73.8 million) to ensure the success distributions of authentic brands to rural areas. It aims to upgrade the rural shopping environment and to do so it collaborated with about 100 well-known brands.

In 2018, Pinduoduo announced RMB 500 million to subsidize brands to go rural. Since August 2018, more than 600 million goods have been sold and most of them were sold to tier 4, tier 5 and tier 6 cities.

According to China’s Rural Area E-commerce Report 2017-2018 published by China International Electronic Commerce Center (CIECC) saying total E-commerce retail transaction volume reaches beyond RMB 1244.8 trillion (USD 183.8 trillion) with a year-on-year growth rate at 39.1%. These years E-commerce grows at 10.75% a much higher pace in rural areas than in urban areas.  

In 2019, go rural campaign becomes more focused on the selected brands. Pinduoduo targets more than 100 well-known brands and brands among its “New Brand Plan”. Well-known brands include Nestle, Lipton, Wahaha (哇哈哈), Oppo, Vivo, Unilever, and Walch etc. Among its "New Brand Plan" list, the food category will be highly emphasized.

Earlier, Pinduoduo partnered with Pepsi, Nestle, Maxwell, Tsingtao Beer and distribute to rural areas via subsidies.

Overall, Pinduoduo helps to brand and market traditional well-known brands to consumers in rural areas. This could help these brands find a new market with less competition to generate revenue and profit. In addition, it on the other side will also upgrade the rural overall shopping environment.

EqualOcean reported earlier that money raised from Pinduoduo’s FPO will partially be used to upgrade the rural shopping environment.

In 2018, Pinduoduo has sold 11 billion products with a total GMV of RMB 471.6 billion (USD 69.57 billion). The total GMV in 2017 was RMB 142 billion (USD 20.95 billion). From 2017-2018, the increase rate is at 233.99%.