Pinduoduo soars in Nasdaq debut in affirmation of China’s social+ internet commerce model
Pinduoduo is the third-largest e-commerce company in China with 5.2 per cent market share, lagging behind leader Alibaba
Chinese e-commerce site Pinduoduo soared on its first day of trading in New York, valuing the company at nearly US$30 billion and making founder Colin Huang one of China’s richest people.
Pinduoduo rose as much as 44 per cent on its trading debut after raising US$1.63 billion in the fourth-largest US initial public offering this year. That contrasted with smartphone maker Xiaomi, which saw its shares slide 1.2 per cent in Hong Kong on its trading debut earlier this month.
The strong trading start for Pinduoduo comes after shares of Facebook slumped after missing projections, raising concerns that social media has peaked.
Pinduoduo is the third-largest e-commerce company with 5.2 per cent market share in China, lagging behind leader Alibaba Group with 58.2 per cent and JD.com at 16.3 per cent, according to research data by eMarketer. The company has amassed about 295 million daily active users as of the first quarter of 2018, and in 2017 recorded a total of 4.3 billion orders on its mobile platform and over 1 million active merchants.
“Pinduoduo is poised to take advantage of the growing Chinese e-commerce market along with China’s rapidly growing middle class,” Eleanor Creagh, a market strategist with Saxo Bank, wrote in a note. “As lower-tier cities become larger and wealthier, they will inject further consumption potential into the economy.”