What happened: JD.com founder Richard Liu late last week said that the online retailer is planning to accelerate its expansion into smaller cities this year. JD’s Pigou service, a Pinduoduo rival, will develop its own app and add more products to attract customers from lesser-developed cities, as well as female users.
Why it’s important: As the competition in China’s first- and second-tier cities grows more fierce, lower-tier cities represent a new opportunity for Chinese e-commerce giants like JD.com and Alibaba. The rise of social e-commerce platform Pinduoduo exemplifies the potential of the lower-income market, which, in the past, went largely ignored. In addition to JD, Alibaba is also eyeing the market with the launch of similar services. On the other hand, Pinduoduo is trying to tap the higher-tier market through grocery delivery and cross-border e-commence.