Pinduoduo founder calls for openness in e-commerce as battle with Alibaba and JD.com escalates

The founder of group-buying platform Pinduoduo has called for more open competition for the benefit of merchants and consumers amid increasing rivalry in China’s e-commerce industry where merchants are often forced to choose sides.

The current “forced exclusivity” in the e-commerce market, where merchants and customers are constrained to a certain platform or choice of payment method, will hurt the industry in the long term, Pinduoduo founder and chief executive Colin Huang Zheng said in his first letter to shareholders since the company went public on Nasdaq in July.

Pinduoduo has challenged the existing exclusivity by providing choices to its merchants and customers in areas such as logistics waybill systems, cloud computing services, and payment platforms, Huang wrote. “Our strategy has never been to disrupt a monopoly in order to create a new one of our own, but to disrupt in order to provide a choice.”

China’s e-commerce landscape, as well as the country’s broader internet sector, is dominated by big players with hands in various aspects of the process, so they can block competitors with exclusive products and services. China’s biggest e-commerce services provider, Alibaba Group Holding, for instance, developed and deployed its own logistics network Cainiao and online payment system Alipay, while excluding similar offerings from rivals such as WeChat Pay from social media giant Tencent Holdings. Tencent, meanwhile, blocks links to Alibaba’s Taobao Marketplace from opening within its flagship messaging and social media app WeChat.

“Attempts to establish or prolong any monopolistic control are both wasteful and destructive,” Huang wrote. “These exclusivities are bound to be broken.”

Alibaba and Tencent did not immediately respond to a request for comment.