Chinese e-commerce upstart Pinduoduo (aka PDD) has a hefty RMB 10 billion ($1.58 billion) to help the marketing and promotion of agricultural products from 500 production origins within this year. The company will use the funds to create brands for these products and build logistics networks.
The move comes after a $3 billion Series C, which valued the social e-commerce site at $15 billion this month. Founded in 2015, Pinduoduo has been gaining momentum quickly, especially among low-income users and lower-tier cities. The platform has accumulated around 300 million users on its app since its release.
The three-year-old startup is seen as the black horse to upend China’s e-commerce industry. As of April 26, 2018, PDD ranks #3 overall in the Chinese iTunes app store ranking for free apps, after popular apps like Tik Tok (aka Douyin) and hit photo app developed by Meitu, and ahead of other shopping apps like Taobao and JD.
Pinduoduo’s quick rise comes from providing easy access to cheap product sourcing, which enables extra-low prices. This caters to the demand of lower-income users who are usually price-sensitive.
The special user profile means that agriculture goods are among the most popular product categories on the platform, among other daily commodities like food, clothes, and groceries.
Since China’s launch of “Internet Plus” strategy, which has an agriculture component, online trading of agriculture goods surged quickly and it is forming a new trend among local e-commerce platforms. Top e-commerce like Taobao and JD all launch similar features to help farmers sell their products online as a major part of their expansion to rural areas.