After several attempts to penetrate the Chinese market, Amazon is trying a new strategy in relying on the very young Chinese platform Pinduoduo.
Amazon tries a new strategy
If you’ve never heard of Pinduoduo, that’s okay. Its founder Colin Huang is a former engineer went through google, which wants to compete with the unmistakable Chinese giant Alibaba. Amazon decides to bet on this e-commerce platform by opening a virtual pop-up on which 1,000 references of the American company will be proposed.
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China represents a gigantic market for Amazon, the whole problem is how to develop well there. An Amazon spokesperson said that: “Our new pop-up on Pinduoduo will offer Chinese customers a selection of approximately 1,000 products at very competitive prices, guaranteed authenticity and high quality delivery”.
This decision is important in Amazon’s strategy. It proves that Jeff Bezos’ business for the moment abandons the idea of developing on its own, in China. Amazon prefers to go through players already well established in the market. The company wants to enter the Chinese market by directly reaching people in rural areas. In April, the company said it would find it difficult to compete with established local players like Alibaba or JD.com. This time around, his strategy seems to be falling into place.
Pinduoduo: the startup that reshuffles the cards in China
Pinduoduo is only 4 years old and has already shaken giants Alibaba and JD.com in the Chinese e-commerce market. The Chinese startup has managed to become popular with rural Chinese and Amazon got it right. Indeed, the company quickly gained ground in cities of “lower rank” with accessible products. Today, it is aimed more and more at large Chinese cities.
Also, Pinduoduo adopts a particularly aggressive pricing strategy, and it seems to be working. For Pinduoduo: “this new offer is a great way to give our users a chance to access international products”. The Chinese app is often used with WeChat and allows its customers to benefit from huge discounts. With 5.7% of market share, Pinduoduo is already the 3rd largest e-commerce platform in China, behind Alibaba and JD.com, after only 4 years of existence.