LatePost reported on August 17 that Pinduoduo, a Chinese agricultural-focused technology platform, is preparing a cross-border e-commerce app, expected to be released initially for the US market in mid-September. The model will follow Shein, which is now the largest Chinese independent cross-border e-commerce platform, and Pinduoduo has been attracting merchants from all categories. Among them, the key categories are low-priced daily necessities and home products that Pinduoduo itself is good at.
This is considered one of the most important strategic projects for Pinduoduo. Many first-level directors of the community group buying business “Duo Duo Grocery,” the formerly most-important strategic project of Pinduoduo, have been transferred to take charge of the new project.
Due to the current sluggish growth of Pinduodou in the Chinese domestic market, a new cross-border project sprouted from its “growth anxiety” in early January this year. In May, the project was officially launched. Gu Pingping, COO of Pinduoduo, and several directors of Duo Duo Grocery and Pinduoduo Investment Promotion went to Europe and America to conduct market research and learn about local warehousing and logistics, supply chains and user consumption habits.
Since May this year, nearly 80 supply chain employees of Pinduoduo have moved to Panyu District in Guangzhou, Guangdong province, which was also the starting point for Shein to build a clothing procurement supply chain. Similar to Shein, merchants of Pinduoduo‘s new cross-border platform only need to be responsible for putting goods online and shipping them to domestic warehouses. The platform will then select products, set pricing and deliver the goods.
Similar to Pinduoduo‘s previous way of attracting small and medium-sized businesses, the new cross-border platform also gives merchants free entry and zero-commission fee support. Sources close to Amazon sellers said that entry costs and commission fees on the platform are very high, and merchants using a full set of Amazon warehousing logistics will see revenue deductions of 30%.
The reason for choosing the US market as Pinduoduo‘s first stop is that the country has had the largest total consumption in the world throughout the past 100 years, but only 14.2% of Americans’ consumption in 2021 was channeled online, while that in China was 24.5% in the same year. In addition, COO Gu Pingping said internally that e-commerce competition in the Southeast Asian market is too fierce.
However, it is not clear which logistics parties Pinduoduo will cooperate with for cross-border transportation. At one time, 90% of the parcels of J&T Express came from Pinduoduo. Before that, J&T Express had extended its service to 13 countries and regions including Asia, Latin America and Africa. Its cooperation with HNA Cargo Co., Ltd. made it possible for cross-border business in European and American markets. A second cooperation between Pinduoduo and J&T Express in European and American markets seems to be no surprise.