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Amazon Opens Pop-Up Store on Chinese E-Commerce Platform Pinduoduo

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Coresight Research

Key Points

On November 25, 2019, Amazon opened a pop-up store on Pinduoduo, which it will operate until the end of December, according to the company.

  • Amazon’s pop-up storefront features 1,000 overseas products for Black Friday promotions, and consumers can browse the deals on the Pinduoduo app.
  • Amazon closed its China domestic marketplace earlier this year, but the company continues to operate its cross-border e-commerce and cloud business. Amazon recently launched its cross-border e-commerce mini program on WeChat.
  •  The partnership gives Amazon access to Pinduoduo’s user base in lower tier markets and helps the Pinduoduo to expand its premium product offerings. 

A few days before the Black Friday shopping holiday in the US, Amazon opened a pop-up store on Chinese e-commerce platform Pinduoduo. The store was launched on November 25 and will run until the end of December, according to Amazon. The pop-up storefront features a selection of 1,000 products from overseas, ranging from electronics, cosmetics and personal-care products to apparel. According to Pinduoduo, the platform is running a Black Friday promotion with Amazon as one of its partners to enable cross-border shopping for consumers.

Black Friday promotion with Amazon on the Pinduoduo app
Source: Pinduoduo

 

What Does This Mean for Amazon and Pinduoduo?

The opening of the pop-up store represents part of Amazon’s China strategy, following the shutdown of its China domestic marketplace on July 18 amid intense competition from local e-commerce giants such as Alibaba’s Taobao and JD.com. Amazon continues to operate its cross-border e-commerce and Amazon Web Services business in China and launched its cross-border e-commerce mini program on WeChat in September.

Pinduoduo, the four-year-old e-commerce platform known for its group-buying deals and deep discounts, is particularly popular with consumers in China’s lower-tier cities. In its third-quarter earnings report, Pinduoduo stated that it has 430 million monthly active users as of September 30. The partnership allows Amazon access to Pinduoduo’s user base in lower-tier markets and boosts the company’s presence in China’s cross-border e-commerce market. The tie-up also offers Pinduoduo the opportunity to build relationships with overseas retailers and expand its premium product offerings, catering to consumers in tier-1 and tier-2 cities.

China’s Cross-Border E-Commerce Market

The cross-border e-commerce business continues to gain traction in China driven by the nation’s consumption growth and rising demand for international products. According to data provider iiMedia, the Chinese cross-border e-commerce market reached ¥9.1 trillion ($1.3 trillion) in 2018 and is expected to achieve ¥10.8 trillion ($1.5 trillion) in 2019, up nearly 20% from last year. The market has become a battleground for e-commerce giants.

NetEase Koala (which was acquired by Alibaba in September this year) and Alibaba’s Tmall Global had a combined market share of over 50% in the first half of 2019, according to iiMedia. Pinduoduo launched its cross-border platform Duoduo International in February, with a goal of hosting 10,000 international brands and achieving ¥200 billion ($28.4 billion) in sales over the next three years.

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