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Alibaba

Alipay launches group-buy function within its app to take on social commerce players like Pinduoduo

Offering the feature within Alipay is also a step towards making the mobile wallet an all-in-one app

PUBLISHED : Thursday, 09 August, 2018, 12:01pm
UPDATED : Thursday, 09 August, 2018, 10:24pm

Alibaba-affiliated mobile wallet Alipay has launched a group-buy function within its app to take on the likes of Pinduoduo, the social commerce start-up that has taken much of China by storm.

The feature, called Pintuan (meaning group-buy) can be found on the main interface of the Alipay app, where a selection of items are displayed at a discounted price if one or more users purchase the item together.

The products are from Taobao, Alibaba’s e-commerce platform, and prices can be reduced from their listing price. Unlike Pinduoduo, Alipay only offers these deals at specific times of the day – 9am, 2pm and 7pm – and in limited quantity.

Offering the feature within Alipay is also a step towards making the mobile wallet an all-in-one app. Currently Alipay is one of the leading mobile payments services in China, together with Tencent’s WeChat Pay. WeChat Pay is already integrated into WeChat, the superapp with over a billion users that lets you do everything from sending messages, ordering food, and even calling a cab. Similarly, Alipay has been adding more services within its app – such as taking out a loan, paying bills and even making hotel and flight bookings.

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

The addition of such a function in Alipay underscores how much Pinduoduo has shaken up the e-commerce scene in China. Pinduoduo encourages users to share shopping deals with their friends to get discounts, and within three years became the third-largest e-commerce firm in the country, behind Alibaba and JD.com.

The company’s popular social commerce model has helped make Pinduoduo founder and chief executive Colin Huang one of China’s richest people, with a current net worth of US$10.5 billion after the company’s public listing on the Nasdaq valued the firm at US$24.98 billion.

How Pinduoduo founder became China's youngest self-made billionaire

The social commerce model is part of the social+ business model that many Chinese internet companies are adopting, melding business together with a social aspect to appeal to users, according to the Chinese Internet Report co-authored by the Post, Abacus News and 500 Startups.

Prior to making the group-buy function available on Alipay, Taobao had launched a similar feature called Taobao Tejia (which means Taobao Special Price), that offered products at price points of below 100 yuan (US$15), including a section where products were sold at 9.9 yuan including shipping. The price points are similar to those for a majority of the products on Pinduoduo.

Alipay didn’t immediately respond to a request for comment.

Online retailer JD.com also adopted a similar feature, JD Pingou, that required customers to refer at least one other person to purchase the product to get a discount.

While the group-buying model has proved to be a hit among Chinese consumers, especially those in lower-tier cities, Pinduoduo has faced a backlash over the quality of some of the products on its platform. Consumers have complained of imitation goods and the company has been accused of trading quality for price.

“Vivi” phone disappears from Pinduoduo after criticism

The State Administration for Market Regulation (SAMR) last week called for a probe into Pinduoduo, requesting relevant authorities to investigate the company for counterfeit products and products that infringe intellectual property. Pinduoduo said that it will cooperate fully and put in place better mechanisms to weed out such products.