Pinduoduo stock soars 19 per cent as it aligns with genuine brands to clean up counterfeit image

Pinduoduo, the social commerce company which became China’s No. 3 e-commerce firm within three years, is addressing the perception that it hawks cheap and counterfeit products by aligning itself with legitimate brands and bringing more attention to brands’ flagship stores.

The company’s Nasdaq-listed stock soared 19.4 per cent to close at US$23.57 on Tuesday, the highest jump since its debut, after Pinduoduo rolled out recent updates that include highlighting products by brand. The Shanghai-based company renamed a homepage segment called “Discounts on Branded Goods” to “Branded Goods Pavilion”, featuring a list of 494 brands with “flagship stores” on the platform.

The brands include NetEase’s Yanxuan platform, which sells Yanxuan-branded goods that Pinduoduo claims to be both good quality and value-for-money. The brand’s minimalist, Muji-like aesthetic on everything from Japanese cotton bedsheets to utensils and clothing have gained it legions of fans in China and helped NetEase rake in 4.4 billion yuan (US$640 million) in e-commerce revenue for the quarter ended June 30. William Ding Lei, chief executive of NetEase, is also an early investor in Pinduoduo.

Other brands with flagship stores on Pinduoduo include Walch, Yamaha and Chow Tai Fook.

A Pinduoduo spokesman said that the company is “improving services constantly” when asked about the recent update.