Social e-commerce platform Pinduoduo is expanding into China’s booming cross-border e-commerce business in an effort to meet growing consumer demand for quality goods, according to Chinese media citing people familiar with the matter. The company launched into the e-commerce stratosphere by appealing to consumers seeking lower prices by offering social tools for discounted group buys on its main selling platform.
An invitation-only version of the platform, dubbed Duoduo International, has been up for select merchants already on its main platform as well as prospective sellers. There are four store types, including a hypermarket format for sellers with at least 35 registered brands, and a flagship store for merchants with exclusive brand distribution rights.
A company spokesperson confirmed the project with TechNode, but would not elaborate further.
The platform is charging zero commission at present for key accounts including consumer brands and online retailers. Global FMCG giants including Nestle, Unilever, and Beijing-based Japanese consumer goods retailer Wandougongzhu have filed their applications and are waiting for approval.
Pinduoduo unveiled the platform in November during the China International Import Expo in Shanghai, detailing plans for 500,000 small and mid-sized global merchants to join the platform over the next three years, said company vice president Li Yuan, according to Chinese media.
While cross-border goods sell at a discount compared with goods imported through conventional channels, it appears Pinduoduo is expanding its portfolio to capture higher-ticket sales than goods on its main site, which are sold at striking discounts through a combination of group buys, coupons and other incentives.
The expansion comes as Chinese e-commerce giants are raising stakes in their globalization initiatives, aiming to bring in more imported products – seen as higher quality – to increasingly selective customers. Alibaba pledged in November to import $200 billion worth of goods into China over the next five years to satisfy consumer demand, said CEO Daniel Zhang.
JD.com announced in September that it will build supply chain sites in 30 countries including Russia to support 48-hour international deliveries. NetEase’s e-commerce affiliate Kaola, meanwhile, is reportedly in negotiations with Amazon to combine their cross-border businesses to provide consumers a wider range of products and more inventory.
Imported goods sell at a premium to domestic goods, though savvy shoppers have quickly grasped that goods sold on cross-border platforms are cheaper than goods imported through conventional channels.