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Amazon to open store on Chinese e-commerce platform Pinduoduo in time for Black Friday: sources

The world’s largest online retailer closed its own Chinese domestic marketplace in July.

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Amazon, the world’s largest online retailer, is set to open a store on Chinese e-commerce platform Pinduoduo after withdrawing its own Chinese domestic marketplace business in July.

“We are excited to partner with Amazon to offer curated products with competitive prices, [an] authenticity guarantee and convenient shipping globally to our 536 million users until the end of December,” a Pinduoduo spokesperson told the Post on Monday.  

Amazon did not immediately respond to a request for comment.

The online retail giant will announce its Black Friday sales on Shanghai-based Pinduoduo on Monday and its store on the site will carry goods from overseas, according to people familiar with the matter.

Amazon has been operating in China for about 15 years – it bought local Chinese online shopping website Joyo.com in 2004 and rebranded it as Amazon China in 2011.

The US company has been shifting its strategy in the country amid fierce competition from domestic operators. About four months ago, it closed part of its e-commerce operations in China to move its focus to cross-border sales and cloud services as part of “operational adjustments”.

Since July 18, Amazon users in China have not been allowed to purchase goods from third-party merchants in the country but have still been able to order goods from the US, UK, Germany, and Japan through the e-commerce platform, according to previous reports by Reuters.

Although it is still expanding significantly in other markets such as India, the US e-commerce company has struggled to gain a foothold in the world’s second-largest economy. In the first half of 2018, Amazon accounted for just 1.2% of China’s business-to-consumer e-commerce market while Alibaba’s Tmall and JD.com together took 83.8% of the market share, according to data from iiMedia Research.

Alibaba is the parent company of the South China Morning Post.

Pinduoduo initially found popularity via its group-buying business model, which offered discounts to users who persuade friends on social media platforms to buy an item together with them to get a lower price. The Chinese e-commerce company has recently been seeking to dispel its association with price-sensitive customers.

The Nasdaq-listed firm’s revenue rose 123% to 7.5 billion yuan (USD 1 billion) in the third quarter of this year, although it still suffered a net loss of 2.3 billion yuan due to surging operating expenses, particularly heavy expenditure in sales and marketing.

Despite the ongoing US-China trade war and a wider slowing in the country’s economy, China’s online retail sales reached RMB 3.9 trillion in the first half of 2019, up 17.8% compared with the same period last year, according to mainland China state broadcaster China Central Television, citing data from the Chinese Academy of Social Sciences.

On China’s annual Singles’ Day shopping extravaganza on November 11, Alibaba set a record of RMB 268.4 billion in sales, while JD.com posted a transaction volume of over RMB 204.4 billion for its Singles’ Day shopping festival from November 1 to 11.

This article first appeared on the South China Morning Post.