The e-commerce (电子商务) company that people talk about most these days is neither Amazon, the American giant, nor Alibaba, China's biggest. It is Pinduoduo (PDD), a Chinese firm that started in 2015 as an online food supplier, but whose success has driven its market value above $200 billion. Last year it was China's fastest-growing internet stock (股票), rising by 330%.
PDD attracts attention for two reasons. One is its business model. David Liu, vice-president of strategy, explains that it has ridden the rise of smartphone popularization rate in China to create an e-commerce experience in which people club together to buy products from computers to bananas. During the spread of Covid-19, this has expanded into a fast-growing business across thousands of towns and villages, in which PDD's users gather to order delivery of local farm produce at bargain prices. This is called "community group-buy" or "interactive commerce".
The second is the way PDD has broken the myth that the giants of online shopping are unbeatable. Until a few years ago, China's e-commerce market seemed a two-way contest between Alibaba and JD. com. It is not the case now. Experts expect PDD's share of online sales in China to be larger than that of JD in 2021 and the number of users to surpass (超过） Alibaba. And although PDD pays out huge funds to attract customers from poorer parts of China to its app, they think it may turn profitable this year.
Remarkably, PDD has done this less by replacing its bigger competitors than by employing parts of the market they have been unable to reach. Although online sales of groceries have rocketed during the pandemic, less than a tenth of the 8. 1 trillion yuan farm-produce market is bought and sold digitally. However competitive a market looks, there is opportunity for newcomers because e-commerce is at an early stage of development.
