Pinduoduo targets US$150 billion total sales for Chinese brands in new five-year initiative

Shanghai-based Pinduoduo has unveiled the latest iteration of its customer-to-manufacturer initiative
The increased support for Chinese manufacturing enterprises has gained urgency amid Beijing’s efforts to boost domestic consumer spending

Pinduoduo

Yujie Xue

Published: 5:26pm, 23 Oct 2020

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Social e-commerce giant Pinduoduo has promised to help local manufacturers develop new home-grown brands and achieve 1 trillion yuan (US$150 billion) in total sales over the next five years, as China sharpens its focus on building up its domestic consumer market.

Shanghai-based Pinduoduo, the country’s second-biggest e-commerce services provider by number of annual active buyers, unveiled the latest iteration of its customer-to-manufacturer (C2M) initiative on Thursday, falling in line with President Xi Jinping’s inward economic pivot to help the country prepare for any worst-case scenario after the coronavirus pandemic.

Pinduoduo introduced its C2M initiative in 2018, when the company pledged to use its platform’s data and online traffic to help small and medium-sized enterprises meet the needs of consumers at a lower cost, while supporting their efforts to create new brands.

The upgraded initiative plans to leverage the Pinduoduo platform’s global user base, consumer big data and various hi-tech advances to support a wider range of Chinese manufacturing companies, according to company vice-president Chen Qiu at the new C2M’s launch on Thursday. He said this would “help promote the formation of a new economic development pattern in China”.

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The Nasdaq-listed company plans to help more than 100 industrial zones across the country develop about 100,000 customised products using its data and technology, and market these on its platform. It also offered to extend more subsidies to these manufacturing enterprises.

The increased support for Chinese manufacturing enterprises has gained urgency amid the coronavirus pandemic, as the world’s second-biggest economy tackles weak consumer spending because of its state-led growth model. This lack of consumer purchasing power flies in the face of Beijing’s new economic plan of creating a massive domestic market to reduce the nation’s reliance on exports.

“Our role is to provide a bridge to connect consumers and manufacturers, and to facilitate the building of new brands,” a Pinduoduo spokesman said on Friday. “The C2M initiative also reflects rising consumer demand for high-quality, value-for-money products and the growing awareness of manufacturers of this demand.”

In the past one and a half year, more than 1,500 companies took part in the C2M initiative to create more than 4,000 customised products, which generated more than 460 million orders, according to Pinduoduo.

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China is home to 710 million online shoppers, which made up 78.6 per cent of the country’s total internet users as of March, according to data from the China Internet Network Information Centre.

Founded in 2015, Pinduoduo had 683 million annual active users in the 12 months to June 30, behind Alibaba Group Holding’s 742 million total and ahead of JD.com’s 417 million tally in the same period.

Alibaba is the parent company of the South China Morning Post.

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