Amazon.com (AMZN) is counting on a smartphone app known for cheap deals to lure Chinese consumers during the Black Friday online spree, in a partnership that extends to the end of the year.
The U.S. e-commerce giant’s cross-border unit has just opened a storefront on Pinduoduo (PDD), China’s No. 3 online retailer after Alibaba (BABA) and JD.com (JD).
Starting from Nov. 28, the three-day sales campaign will offer Chinese consumers a range of overseas products from Australian baby formula to luxury watches and Nintendo Switch consoles. Presales for some brands are already underway for the U.S.-inspired annual shopping extravaganza.
PDD and Amazon said their partnership would continue until the end of December. In a statement, Amazon said its pop-up store on PDD will provide about 1,000 branded foreign products.
In July, Amazon shut down its Chinese marketplace business in yet another example of how U.S. tech companies struggle to contend with local competitors in China. The company still runs businesses including Kindle e-books and international operations in the country. Kindle has flagship stores on Alibaba’s Tmall, JD and PDD.
While Chinese buyers are accustomed to splurging during shopping festivals created by local retail giants, they also seek out bargain foreign products during Black Friday. The tie-up will help Amazon tap the half-billion annual active buyers on PDD’s addictive app.
It comes on the heels of Alibaba’s Singles Day promotion on Nov. 11, which has overtaken Black Friday to become the world’s biggest shopping event. Alibaba logged a record $38 billion of purchases during the 24-hour shopping marathon this year. JD and PDD also launched similar campaigns around that date.
Founded in 2015, PDD has carved out a niche with social commerce that encourages making purchases with others in return for generous discounts. But the Shanghai-based startup is now working to shake off its reputation for hawking cheap products, just as rivals Alibaba and JD delve into PDD’s base of smaller cities. Last week, the company posted worse-than-expected earnings for the third quarter, triggering its biggest share drop since its July 2018 debut. Its partnership with Amazon now offers the company a chance to recover some of the lost ground.
“The move works disproportionately in Pinduoduo’s favor,” said Michael Norris, research and strategy manager at Shanghai-based consultancy AgencyChina. “It adds credence to its claims that it’s a space for consumers to buy branded goods, and accelerates internal plans to be active in cross-border e-commerce.” (Source: investors.com)