JD.com launches its Pinduoduo rival, with a little help from WeChat

Alibaba and JD.com are penetrating down into lower-tier cities while Pinduoduo does the opposite.

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Beijing-based JD.com has launched its online group-buying service Thursday in a move to catch up with China’s social e-commerce tide that gave rise to the country’s e-commerce challengers like Pinduoduo, or PDD.

The new service comes in the form of a dedicated app, dubbed Jingxi, as well as a mini-app that resides in WeChat. Additionally, Jingxi users will be able to access the service through WeChat’s “Discover” tab around the beginning of October. WeChat is believed to be instrumental in helping the growth of PDD in its early days.

The move also marks the Chinese e-commerce heavyweight’s most recent effort to expand its presence into China’s lower-tier cities and even rural areas to seek additional growth, as online shopping market growth has plateaued in the Middle Kingdom’s higher-tier cities and towns.

Jingxi is an upgrade from its predecessor named JD Pinguo that mostly targets Chinese female consumers and small-city shoppers with ultra lowly priced items.

Jingxi took many leaves from PDD’s book. It also offers flash sale deals and items at a bargain price. Shoppers could enjoy steep discounts either when they share an item to their friends, or by simply joining an on-going group buying deal on the app.

However, what could help set Jingxi apart, is the Factory-to-Consumer (FoC) model the service taps in a bid to provide affordable yet still quality items.

PDD’s rampant and near miracle growth has already sent chills to the Chinese e-commerce duo, Alibaba and JD, who are under pressure from a slowing Chinese economy and a saturated e-commerce market in China’s cosmopolitan cities.

Both Alibaba and JD have now launched their own initiatives, through Juhuasuan and Jingxi, respectively, to reach the untapped consumers in China’s hinterlands.

Earlier this month, Alibaba held a Super Bargain Day sales, which mainly featured low-price items and then generated a roughly gross merchandise volume (GMV) of USD 8.3 billion within two days.

JD.com also saw better growth from lower-tier cities compared to the higher ones. Now about half of users are coming from the lower-tier Chinese cities, according to stats based on its customers’ addresses.

At the same time, there is a startling contrast when PDD started its efforts to lure urban consumers by selling high-end products such as the new iPhone 11 among other things that its typical customers from the hinterlands won’t be able to afford.