Pinduoduo announced Sunday a strategic partnership with GOME Retail. The e-commerce upstart is investing $200 million worth of convertible bonds in the household appliance and electronics retailer.

“This strategic partnership is a win-win-win. Consumers win because they get a wider range of top domestic and international brands at competitive prices, GOME wins because they can broaden their access to our 585.2 million users, and PDD wins because we enhance our foothold in household appliances and electronics.”

David Liu, Vice President of Strategy at Pinduoduo, says in a statement

Why it matters: Chinese retailers, both online and offline, are working together to increase operational efficiency and improve user experience by leveraging each others’ user base, supply chains, and technological capabilities.

Listen: An interview with Pinduoduo’s David Liu

Details: Pinduoduo is planning to integrate GOME’s product range, logistics and after-sales customer service to its platform.

  • The bonds will carry a coupon of 5% per annum and a tenure of three years.
  • If converted at HK$1.215 per share, Pinduoduo would own 1.28 billion shares or approximately 5.6% stakes in GOME.
  • Pinduoduo indicates that they have sourced the fund from its $1.1 billion private share placement completed last month. The company said then that they would use the proceeds to help finance growth, upgrade the shopping experience for our users and to offer more subsidized products.
  • Pinduoduo will add GOME’s product range—including top domestic and international brands like Haier, Midea, Toshiba, and Siemens—onto their platform at the same, or lower price.
  • PDD will provide GOME with digitalization strategies, technology, subsidies, and after-sales service.

Context: Pinduoduo and GOME have been working together since as early as 2018. On March 21, the two companies jointly held a promotion to give away RMB 500 million worth of discounts and consumption subsidies on more than 6,000 items.

  • GOME is operating over 2,600 offline retail stores across 776 cities as of 2019. Of the total, 1,026 are located in county-level cities.
  • Pinduoduo failed market expectations for a second consecutive quarter in Q4. The COVID-19 outbreak is expected to further weigh on first-quarter results.
  • Alibaba invested $4.6 billion in GOME rival, Suning, in 2015 to facilitate a range of collaborations.

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via or Twitter.