Pinduoduo doubles down on rural China, with five-year, US$7.1 billion e-commerce campaign

Social e-commerce giant Pinduoduo is investing at least 50 billion yuan (US$7.1 billion) over the next five years to initiate online retail programmes in China’s rural areas, helping create a “new infrastructure” to boost nationwide demand for agricultural products.

Shanghai-based Pinduoduo, the country’s No 3 e-commerce services provider by gross merchandise volume, plans to help foster the development of 1 million rural online shops on its platform during that period, with each store targeted to generate more than 1 million yuan in annual revenue, according to the company’s announcement on Tuesday.

“PDD is very positive and optimistic about China’s agricultural modernisation and the online penetration of agricultural goods,” Pinduoduo co-founder Sun Qin said in an interview on Wednesday. The company is listed on the Nasdaq Stock Market under the ticker symbol PDD.

Sun indicated that online penetration of agricultural goods in mainland China will reach 800 billion yuan within the next five years. Total online sales from farmers and co-operatives on Pinduoduo, China’s biggest e-commerce platform for agricultural goods, “will exceed 1.5 trillion yuan”, he said, without elaborating on timing and other details.

E-commerce in China’s rural areas and lower-tier cities has become more competitive over the past few years amid the slowdown in the country’s major cities like Beijing and Shanghai. Pinduoduo’s growth in rural e-commerce has intensified its rivalry with Alibaba Group Holding and JD.com. Alibaba, which runs the online retail platforms Taobao Marketplace and Tmall, is the parent company of the South China Morning Post.