Pinduoduo vies for untapped consumers in burgeoning online grocery market
- Online grocery services have become a focus for many of China’s e-commerce companies after the coronavirus pandemic drove up demand
- Digitising and improving the current rural supply chain infrastructure to handle delicate produce could be a costly challenge for e-commerce platforms
Pinduoduo has raised the stakes in rural e-commerce by pledging to beef up investment in the digitisation of the rural supply chain as it competes with rivals Alibaba and JD.com for untapped consumers who are buying more groceries online in the wake of the coronavirus outbreak.
The social e-commerce giant said it has become China’s largest online platform for agricultural products by enabling direct selling from farms to dining tables. To strengthen its leadership in the field, Pinduoduo will invest more in building the rural supply chain infrastructure, according to a statement issued after the company reported its first quarterly profit since IPO on Thursday.
“We are committed to driving a new infrastructure built for agricultural products for all consumers and farmers in China,” Pinduoduo CEO Chen Lei said during the earnings call.
Online grocery services have become a focus for many of China’s e-commerce companies after the coronavirus pandemic drove up demand. Alibaba’s supermarket chain Freshippo and delivery giant Meituan are both major players in the field. (Alibaba owns the Post).
Speaking on the company’s second-quarter earnings call in August, Meituan chief executive Wang Xing said the online grocery market “is going to be a very exciting business … which will eventually cover hundreds of millions of people”.
“Low-priced, high-frequency online grocery shopping is probably the best way for e-commerce platforms to attract and retain new users,” said Chen Tao, an analyst at Beijing-based consultancy Analysys. “It helps platforms reach more users in the less-penetrated lower-tier regions and cultivates their online consumption habits.”