PingPong Upgrades Wish Sellers Services
March 27, 2019, PingPong, a China-based fintech company, upgrades payment receive services for sellers on Wish, an America based e-commerce platform.
March 27, 2019, PingPong, a China-based fintech company, upgrades payment receive services for sellers on Wish, an America based e-commerce platform. In this upgration, Pingpong applies conversion services charges as low as 0.4% for 90 days after Wish sellers links its store's Wish accounts, either new or existing ones, to Pingpong accounts.
PingPong Wish Service started in September 2016. In around three years, PingPong claims that it solves the following 4 pain points faced by sellers on Wish
#1 High service or exchange charges
#2 Restrictions on withdrawing US dollars out
#3 Difficulties in reaching customer services
#4 Complicated operating processes
PingPong noticed that many small sellers have insufficient money to hoard inventories in the peak season, thus it develops a financing product called Light Year (光年指日达). Instead of granting sellers loans in advance, Light Year goes with orders and will help sellers to receive Account Receivables amount as soon as orders are placed (max 90 days in adcance）. This will significantly improve asset use and business operations efficiency and cash flows.
PingPong can also help sellers with export tax refund, VAT tax services, optimizing forex rate etc.
PingPong & Wish
Another name for Wish is the American Pinduoduo. As its nickname suggests, the products suggest product sold on Wish is cheap. In a sense that Pinduoduo connects Chinese manufacturers and Chinese consumers but Wish connects Chinese manufacturers and overseas consumers (mainly US & European).
The valuation of Wish is around USD 8.5 billion, equal to the sum of Macy’s, J.C. Penney, and Sears combined.
This platform was founded by Peter Szulczewski (CEO) and Danny Zhang (CTO) in 2011, former programmers at Google and Yahoo. While HUANG Zheng (黄铮), the CEO and founder of Pinduoduo, holds a similar background graduating from Zhejiang University (bachelor) and University of Wisconsin-Madison (Ph.D.) and having working experiences at Microsoft and Google, says University of Wisconsin-Madison website.
According to MarketplacePluse, 94% of the sellers on Wish are from China, especially Guangdong, Zhejiang, and Fujian. The three provinces mentioned above are famous for cross-border trades. Compared to Amazon, Wish has even a lower barrier to entry.
Strong demand for cheap but qualitative Chinese goods will push more sellers to join Wish. Via ePacket, USPS's shipping program, the shipping expenses for small items (less than 4.4 pounds) from China can be cheaper than shipping item domestically, says the Atlantic. On Amazon US and eBay US, there are at least 40% of sellers are from China.
This article names one competitor of PingPong - WorldFirst.
WorldFirst, a UK-headquartered cross-border payment company, has been acquired by Ant Financial for USD 700million. Till the merge, WorldFirst has 80 thousand active users and yearly GMV of GBP 10 billion.
Competing with WorldFirst solely might be less challenging; however, competing Alibaba-backed WorldFirst would be extremely stressful.
The industry that PingPong entered is becoming the red sea. The service charges have been decreasing from 2% in 2015 to below 0.5% in 2018. The competition is likely to further drive the charge rates down. While lowering service rates will damage cross-border payment companies' profit margin.