Chinese social e-commerce site Pinduoduo has signed a strategic cooperation agreement with Shenzhen MTC Co., Ltd, a contract manufacturer that produces more than 10 million TV sets annually for brands like Philips, Haier and Xiaomi, reported 36Kr Monday. The two companies will collaborate in research and development, design and manufacturing, as well as marketing.
MTC chairman Gu Wei said that his company will release a TV set that is specifically designed for Pinduoduo’s users, adding that the social commerce platform and his company have already laid out a manufacturing plan.
The collaboration with MTC is part of Pinduoduo’s client-to-manufacturing (C2M) initiative, in which it plans to partner with 1,000 contract manufacturers to produce merchandise that fits the preferences of Pinduoduo’s consumers. In the 12 months ended March 31, the platform had 443 million monthly active users.
Previously, Pinduoduo’s C2M program involved tie-ups with tissue paper maker Sipiao and cookware producer Sanho. Neither of these brands are household names, but being able to directly place their products in Pinduoduo’s retail channels under their own brand names represented a new source of revenue for the firms.
Sipiao chairman Niu Guanglan revealed to Chinese media outlet The Beijing News that his company received more than 30,000 orders on Pinduoduo for their self-branded tissue paper in the first month.
Niu said that it only took three years for Sipiao to grow from a micro manufacturing company into a top national brand. He specifically pointed to the partnership with Pinduoduo that propelled his company to new heights, as earlier attempts to establish their own brand had fallen flat.
Pinduoduo was once known as a retail platform popular with consumers who were less brand-conscious and more price-sensitive, typically located in smaller cities and rural areas in China. But Jiguang data shows that 44.2% of Pinduoduo’s newly acquired users in the first quarter are located in first- and second-tier cities, where urban density translates to more consumption options. Buyers in these areas have turned out to be the largest consumer group for fruits on Pinduoduo, the report also shows.
36Kr is the parent company of KrASIA.