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Pinduoduo and Alibaba clash over ban affecting group-buying platform Juhuasuan

Pinduoduo employees have reported a ban from Alibaba to use Taobao’s Juhuasuan, while Alibaba says that it will not allow violation of the platform’s terms.

Photo: Provided by company with the press release

Alibaba’s group-buying platform Juhuasuan, available via the Taobao app, and social e-commerce company Pinduoduo have commenced a bitter online fight after a group of Shanghai-headquartered Pinduoduo employees reported on Wednesday that their Taobao app has been malfunctioning.

Pinduoduo employees publicized their frustration on Chinese professional networking platform Maimai, arguing that they were unable to collect discounts and buy products under Juhuasuan’s RMB 10 billion (USD 1.4 billion) subsidy program, on the Taobao app. 

Chinese tech media outlet Huxiu first reported about it through its official account on Chinese microblogging platform Weibo, which triggered a response by Juhuasuan.

Through a Weibo account named JHS Xiaolin, the firm said that it welcomes Pinduoduo staff to use its platform, but also accused that “some users, whose registration information shows that they belong to a certain area,” have been using the platform to gain certain information related to products and sellers, in violation of the platform’s terms.

Juhuasuan added that it would give a “thump-up” to Pinduoduo employees’ courage to admit all by claiming that their Taobao accounts have been banned.

The drama didn’t end there. Clapping back on Weibo, Pinduoduo, using an account named PDD Lefu, said the firm’s employees “were indeed” not just doing some casual shopping, but instead visiting the platform to check “to what extent Taobao has copied Pinduoduo’s initiatives,” such as the RMB 10 billion subsidy program.

Pinduoduo also pointed out that Alibaba’s ban came right as the e-commerce giant prepared the launch of its new standalone app, Taobao Tejia, released today Thursday, which also focuses on low-price goods and discounts.

Whatsmore, the group-buying platform also asked Alibaba to exclude employees of artificial intelligence startup Yitu, a company that shares the same office building of Pinduoduo in Shanghai, from the block.

Alibaba has not responded to KrASIA’s request for comment, while a Pinduoduo spokesperson refused to comment on the matter.

“The war between Alibaba and Pinduoduo has fully escalated since Juhuasuan launched the RMB 10 billion subsidy program on December 12 last year,” Cecilia Xu, an analyst with 36Kr Research, told KrASIA on Thursday.

“Banning some Pinduoduo employees’ Taobao accounts also shows Alibaba’s determination in fending off Pinduoduo. Now, especially amid the COVID-19 pandemic period, it is the right time for Alibaba to win over Pinduoduo, as Alibaba has an obvious advantage in the variety of its merchandise” Xu said.

A source close to the matter confirmed with KrASIA that Pinduoduo’s employees in the Beijing office have not been affected.

The rivalry between Pinduoduo and Alibaba is fueled by the rapid growth of the new upstart. Pinduoduo had 585.2 million users who actively purchased goods in 2019, an increase of 40% year-on-year, further closing its gap with Alibaba, which had 711 million active consumers last year.