Pinduoduo draws shoppers outside China’s big cities with low-priced goods. It trails only Alibaba in number of users, and has a larger market cap than eBay.
“Suzhi scrolls through the front page of Chinese ecommerce app Pinduoduo, browsing T-shirts, electronics, and fruit, all priced at a fraction of the cost of similar products on other platforms. “I have to be careful not to use this app too much. It has so many deals that I want to spend all my time and money on it,” says the 46-year-old housewife and ayi (the Chinese term for nanny) from rural Inner Mongolia.
Shoppers like Li—price conscious and far from China’s big cities—have made Pinduoduo China’s hottest ecommerce player. Its 366 million monthly active users trail only Alibaba, outranking better-known rivals such as JD.com. Last month, Pinduoduo reported that second-quarter revenue had more than doubled from a year earlier. Its $40 billion market value exceeds eBay’s and places it among China’s five most valuable internet companies.
Analysts attribute the company’s success to its rock-bottom bargains, discounts based on group buys that prod users to recruit friends, and a design that relies more on browsing than search. Rebecca Fannin, author of three books on China, calls Pinduoduo “a Chinese Groupon on steroids.”
Ashley Dudarenok, coauthor of the recently published New Retail: Born in China Going Global: How Chinese Tech Giants are Changing Global Commerce, says Pinduoduo tapped an opening to “educate rural users to use online shopping.” She says rural Chinese are less brand-conscious than their urban counterparts, and so more amenable to Pinduoduo’s browsing-based system.”