Thank you for subscribing.

Please check your email to confirm.

Unsubscribe success..

You already subscribed and confirmed.

Please check your email.

You already subscribed.

Please check your email to confirm.

E-commerce for Everyone: Pinduoduo Breaks into China's 'Internet Top Five'
E-commerce for Everyone: Pinduoduo Breaks into China's 'Internet Top Five'
Pinduoduo workers harvesting oranges in Zigui county, Hubei province. Image credit: Pinduoduo
Associated Company
Pinduoduo Pinduoduo

The market cap of Pinduoduo (拼多多, PDD:NASDAQ), one of the largest Chinese e-commerce platforms, hit USD 39 billion this week, surpassing that of used-to-be-big Internet company Baidu (百度, BIDU:NASDAQ). Losing 33.9% since the beginning of this year, the search engine firm has only a modest USD 36.5 million in the market cap as of August 29.

Founded in 2015, Pinduoduo was among first China's e-commerce unicorns. Its valuation grew tenfold, reaching USD 15 billion in early 2017 in a flash, after tech behemoth Tencent (0700:HK) poured over USD 200 million into the firm. The company raised another USD 1.4 billion in its Series D financing round and then made a successful exit, going public on Nasdaq in July 2018. 

Shanghai-based Pinduoduo is one of the B2C platforms that target consumers in countless China's tier-two and tier-three cities. It initially launched a low-margin marketplace business, concentrating on the economy of scale and thereby maximizing market penetration. Cutthroat competition between China's e-commerce leaders along with the recent consumption upgrade made the company adjust its business model (read about the details in EqualOcean's interview with Pinduoduo's VP Victor Tseng).

Nowadays, Pinduoduo is a firm with nearly 366 million MAU (monthly active users), it is the second online marketplace in China by this indicator. EqualOcean projected that the company's market share in the country reached 16.3% this spring. However, it is still far from the absolute leader, Alibaba (BABA:NYSE), which is currently holding over 58% of the local market.

Last week, the newborn e-commerce juggernaut published its second-quarter financial results. Better-than-expected numbers stirred the markets that immediately got frenzied, resulting in a huge leap of the company's New York stock. The share price has surged 34.39% from USD 25.01 to USD 33.61 in just two weeks of trading.

Betting big on Pinduoduo and the likes, global investors consider the inexhaustible demand existing in China's ever-growing peripheral agglomerations. What's more, due to the platform's specific price segment, this demand isn't likely to ebb away once an economic downturn comes. EqualOcean believes that the core capacities of the company are crisis-proof.

*Contributor: Wang Butao

Enterprise Information

Pinduoduo is a Chinese e-commerce platform that allows users to participate in group buying deals.
CATEGORIES: E-commerce
Last Funding Type
IPO
Number of Employees
2000+
Number of Funding Rounds
6
Total Funding Amount
3.30B

Enterprise Information

Pinduoduo
Pinduoduo is a Chinese e-commerce platform that allows users to participate in group buying deals.
CATEGORIES: E-commerce
Last Funding Type
IPO
Number of Employees
2000+
Number of Funding Rounds
6
Total Funding Amount
3.30B

Reach the Author!

Ask the author questions about the copied text

MOST READ

THE LATEST

Any Question

EqualOcean is a leading industrial tech media and investment research company that focuses on technological and industrial innovation in China.

We aim to assist Chinese entrepreneurial enterprises to break into the global market and provide overseas investors, VCs, and enterprises with a deeper understanding of China's business environment and to seize opportunities in China.

Join over 800,000 of your peers