JVC, a Japanese TV set brand, has rolled out four customized products on China’s e-commerce site Pinduoduo, which are priced below the industry norm, Pinduoduo said in a press release. Two of the products have already sold out, according to JVC.
This is the first result of a strategic cooperation between JVC’s Chinese owner Shenzhen MTC and Pinduoduo signed in early July, part of the e-commerce platform’s client-to-manufacturing (C2M) initiative. Pinduoduo plans to partner with 1,000 contract manufacturers to produce merchandise that fits the preferences of its consumers. At the end of this year’s first quarter, the platform had 443 million monthly active users. Pinduouo is known for its low-price strategy.
Shenzhen MTC, as a contract manufacturer, also produces TV sets for brands like Philips, Haier, and Xiaomi, with an annual output of about 10 million units.
JVC, which has just set up a flagship store on Pinduoduo before the new product launch, sold more than 4,000 TV sets in 22 hours, Pinduoduo told KrASIA on Monday, citing JVC’s sales data.
The JVC store is now out of stock of the 65-inch 4K TV sets priced at RMB 1,999 (roughly USD 283) after selling the first 1,000 units prepared. By comparison, the next most affordable 65-inch 4K TV set is offered by Xiaomi, and it sells at RMB 2,699 on JD.com, a steep price difference for roughly the same specs.
The JVC store on Pinduoduo is also out of stock of the 32-inch 4k TV sets priced at RMB 499 after 1,500 units were sold.
The other two models, namely a 55-inch TV sets priced at RMB 1,369 and a 39-inch 4k TV sets, are still available.
“JVC and Pinduoduo have communicated deeply in aspects including user profile, pricing strategy, size parameters, supply chain optimization and others, making it possible to produce products of lower costs and higher quality,” said Deng Zuqin, JVC’s China head, in the press release.
However, even with the cost cuts achieved with these efforts, Pinduoduo still chipped in to subsidize these four products so that they could be priced as low as they are now, the company confirmed with KrASIA. A spokesperson added that Pinduoduo, which is still in its growth stage, needs to keep old users to stick with it and attract new users. The Chinese company, which launched in September 2015, gained its first users from China’s smaller cities and even rural areas, changing the country’s e-commerce sector once dominated by Alibaba and JD.com.
Pinduoduo’s 2018 annual report showed that sales and marketing expenses reached RMB 13.4 billion (USD 1.96 billion) in 2018, as it “invested in cultivating greater user recognition through online and offline advertising campaigns and promotions.” These expenses were even slightly more than its total revenue in the same year, which amounted to RMB 13.1 billion (USD 1.9 billion).