Amazon to open pop-up store on Pinduoduo until year-end

Amazon, the world’s largest online retailer, is set to open a pop-up store on Chinese ecommerce platform Pinduoduo after withdrawing its own Chinese domestic marketplace business in July.

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“The Amazon Global Store pop-up store on Pinduoduo provides customers with a curated selection of about 1,000 overseas products with competitive prices, authenticity guarantee, and convenient shipping,” Amazon said in a statement.

“We look forward to enabling customers to enjoy cross-border shopping through this store,” the company said, adding that the store will be available until end of December.

Amazon has been operating in China for about 15 years – it bought local Chinese online shopping website Joyo.com in 2004 and rebranded it as Amazon China in 2011.

The US company has been shifting its strategy in the country amid fierce competition from domestic operators. About four months ago, it closed part of its ecommerce operations in China to move its focus to cross-border sales and cloud services as part of “operational adjustments.”

In a statement on Monday, Amazon said its commitment to China remains strong. “We will continue to invest and grow Amazon Global Store business in China,” it said, adding that it will focus efforts in China on cross-border sales and “to keep improving the experience for Chinese customers.”

Since July 18, Amazon users in China have not been allowed to purchase goods from third-party merchants in the country but have still been able to order goods from the US, the UK, Germany, and Japan through the ecommerce platform, according to previous reports by Reuters.

Although it is still expanding significantly in other markets such as India, the US ecommerce company has struggled to gain a foothold in the world’s second-largest economy. In the first half of 2018, Amazon accounted for just 1.2% of China’s business-to-consumer ecommerce market, while Alibaba’s Tmall and JD.com together took 83.8% of the market share, according to data from iiMedia Research.

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

Pinduoduo initially found popularity via its group-buying business model, which offered discounts to users who persuade friends on social media platforms to buy an item together with them to get a lower price. The Chinese ecommerce company has recently been seeking to dispel its association with price-sensitive customers.

The Nasdaq-listed firm’s revenue rose 123% to 7.5 billion yuan (US$1 billion) in the third quarter of this year, although it still suffered a net loss of 2.3 billion yuan (US$327 million) due to surging operating expenses, particularly heavy expenditure in sales and marketing.

Despite the ongoing US-China trade war and a wider slowing in the country’s economy, China’s online retail sales reached 3.9 trillion yuan (US$554.4 billion) in the first half of 2019, up 17.8% compared with the same period last year, according to mainland China state broadcaster China Central Television, citing data from the Chinese Academy of Social Sciences.

On China’s annual Singles’ Day shopping extravaganza on November 11, Alibaba set a record of 268.4 billion yuan (US$38.2 billion) in sales, while JD.com posted a transaction volume of over 204.4 billion yuan (US$29 billion) for its Singles’ Day shopping festival from November 1 to 11.