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Pinduoduo cements position as Chinas second-largest ecommerce player

Alibaba and JD.com have been in a war over the Chinese e-commerce space for a decade or so, but a third player called Pinduoduo has managed to shake up the duopoly in recent times. The startup, which was founded in 2015 by an ex-Googler and went public on the Nasdaq last July, has further flexed muscles during the recent 6/18 shopping spree.
According to data provider QuestMobile, Pinduoduos daily active users have outnumbered JDs for at least the past 12 months, and it came out of the mid-year sales festival first popularized by JD as a counterpart to archrival Alibabas 11/11 shopping day with 135 million DAUs.
JD, in comparison, ended with 88 million DAUs and Alibabas Taobao retained its top spot at 299 million. That result further solidified Pinduoduos position as Chinas second-biggest ecommerce company by number of users.
The boom of Pinduoduo is in part attributable to ties with its investor Tencent also a backer of JD which enables it to sell via WeChats lite app and tap the giants vast social network. Alibaba, on the other hand, has for years been prevented from selling through WeChat.
In terms of sales, Pinduoduo still remains some miles behind JD, which focuses on large-ticket items like home appliances and targets Chinas urban, deep-pocketed shoppers. Pinduoduo took a more rural tack and has built a reputation for hawking ultra-cheap goods at small-city consumers.
In 2018, Pinduoduo racked up 471.6 billion yuan ($68.6 billion) in gross merchandise volume, a somewhat problematic term for gauging sales as it totals the value of orders placed, regardless of whether they are actually sold, delivered or returned. (Alibaba stopped revealing GMV a few years ago.) JDs GMV was almost four times that of Pinduoduo at 1.68 trillion yuan ($243.9 billion) last year.
One has to keep in mind that JD is a 21-year-old firm born out of the PC era, whereas Pinduoduo has been up and running on mobile for less than four years. The startups continued growth is undeniable. In a March report, investment bank UBSs Evidence Labpredicted that Pinduoduo could overtake JD in GMV as early as 2021.
But Pinduoduos story is not all roses. Currently trading at $20.54, its stock has plunged about 35 percent since a March high. The online marketplace has also been chided for selling counterfeits and subpar goods, an endemic problem thats long plagued Chinese e-commerce. This year Pinduoduo was put on the U.S. governments notorious blacklist alongside rival Alibaba for selling fakes, while the company claims its actively working to root out problematic listings.
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