Pinduoduo beats Alibaba and JD in customer acquisition
Pinduoduo (PDD) is a Chinese e-commerce company that went public in the United States in July 2018. The company was founded in 2015, meaning it’s more than 15 years younger than Alibaba (BABA) and JD.com (JD), but it’s quickly gaining ground and posing an increasing threat.
At the end of September 2018, Pinduoduo had 385.5 million active buyers on its platform compared to 601 million for Alibaba and 305 million for JD. Pinduoduo added 42 million active buyers in the third quarter compared to the 25 million active buyers added by Alibaba in the same period. JD lost more than 8.0 million active buyers in the quarter.
eBay (EBAY) closed the third quarter with 177 million active buyers. Amazon (AMZN) doesn’t disclose its customer base, but it said in April last year that its Prime program had attracted more than 100 million subscribers globally. Prime subscribers are Amazon’s most active customers. They spend more than twice as much as regular customers on Amazon shopping on average annually, according to Consumer Intelligence Research Partners’ estimates.
Pinduoduo seeks to set itself apart
To penetrate China’s e-commerce market, which is dominated by Alibaba and JD, Pinduoduo has developed a business strategy to set itself apart. Pinduoduo runs a social e-commerce platform where people can form shopping groups and purchase in bulk at steep price discounts. This way, Pinduoduo is able to generate big orders for its merchants while delivering huge savings for shoppers.