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Pinduoduo Reaches Strategic Cooperation with Wuhan Municipal Government
COVID-19 and China
Image credit: Megan Thomas/Unsplash

On April 8, the first day after Wuhan ended its lockdown, the local government reached strategic cooperation (in Chinese) with Pinduoduo (PDD:NASDAQ) – the rising Chinese e-commerce giant – to file a series of projects aimed at supporting local businesses to get more orders, stabilize production capacity and help to facilitate stable regional economic growth.

Previously, On April 1, Pinduoduo reached strategic cooperation with the Hubei Provincial Department of Agriculture and Rural Affairs to officially launch the ‘Wuhan Selective Products Zone’ under the oversight of the Central Guidance Commission to Hubei and the Ministry of Agriculture and Rural Affairs. The idea is to leverage Pinduoduo’s platform to promote the agricultural products in the region to the national market.

Meanwhile, the platform also leverages multiple marketing approaches to direct more traffic and  rolling out special subsidies on eligible products, to ensure that merchants and farmers can make a profit.

“As everyday life in Wuhan gradually gets back to normal and the lockdown of the city ends, e-commerce platforms with new models are expected to play an important role in helping enterprises and individuals – in particular those doing agricultural business – in Wuhan resume work,” Shan Lipo, Director of the SME Development Promotion Centre of the Ministry of Industry and Information Technology (MIIT), noted during the signing ceremony.

According to Economical Daily (in Chinese), the ‘Wuhan Selective Product Zone’ sold more than 2 million kilograms of products on the day of its launch (April 1).

Pinduoduo has 585 million annual active buyers. In 2019, the transaction volume of agricultural products on the platform reached CNY 136.4 billion (USD 19.3 billion), which ranked as the largest growing agriculture platform,” according to Wang Jian, vice president of Pinduoduo. “Many local governments have reached out to us during the epidemic in looking for cooperation, to seek distribution channels for their unsaleable agricultural products.”

As Hubei province, the epicenter of the current pandemic, is returning back to normal, many companies are resuming their operations therein. For example, Yongan Pharmaceutical (002365:SH) has enabled (in Chinese) new intelligent production lines in its local facilities. Among other examples are fast-food chain Zhou Hei Ya (1458:HK) that has recovered (in Chinese) 20%-30% of its full production capacity and snack company Bestore (603719:SH), which posted (in Chinese) 6,500 new positions to help the local government resolve the current unemployment issues in the region.

Editor: Luke Sheehan

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