One of China’s largest e-commerce companies, Pinduoduo Inc., is getting ready to launch its first cross-border expansion into the North American market, according to people familiar with its intentions. Pinduoduo, launched in 2015, broke the supremacy of Alibaba and JD with rock-bottom pricing and a group buying model that encourages users to discuss their purchases on messaging platforms in order to receive lower costs, will leverage the move to make its greatest international push.
The company is expected to record revenue growth of 2.5% for the second quarter after mostly surviving macroeconomic challenges this year. During the same time period, market leader Alibaba Group Holding Ltd., which operates AliExpress as its international branch, had its first-ever sales decline. The economy has been negatively hit by COVID limits and a regulatory crackdown on Chinese tech companies, which has hindered growth at home in China.
The Shanghai-based company will emulate successful overseas endeavours like Shein and AliExpress by searching for fresh development opportunities when its local economy falters.
Despite its delayed entry, PDD succeeded in China’s fiercely competitive online retail market by using social e-commerce strategies that have contributed to the growth of a user base of more than 880 million active users annually. It attracted customers by developing a hybrid of WhatsApp and Groupon where users may find bargains on goods like fruits and toys and then invite friends to purchase them at a discount.
According to market research company EMarketer, US-traded PDD has an approximately 13% market share in Chinese online retail. It has recently reduced its significant investment in online groceries, which were formerly seen to be the most promising new market for growth in the nation. The US market presents an alluring outlet to leverage its current infrastructure and merchant network globally as it adopts more cost-control measures.
