The startup known as Pinduoduo or PDD is quickly rising in the Chinese market, challenging e-commerce giant Alibaba. However, it is also earning the ire of many companies and government due to its frequent violation, particularly of intellectual property rights. The company is just like Alibaba or Amazon in most sense. However, many of the products in Pinduoduo are counterfeit.
China’s tech giants Tencent and Alibaba continue to compete for the country’s increasingly wealthy customers in major urban centers. Meanwhile, Pinduoduo has been making moves and capturing the attention of a less noticeable market: China’s low-income people from low-tier towns and cities. Just this January, the Pinduoduo app has reached 103 million active users.
Since then, it has surpassed Vipshop, a New York-listed Chinese retailer. For a long time, Alibaba dominated the Chinese online market. However, its digital malls aren’t that popular with some people. These are people who find some of Alibaba’s selections to be slightly expensive. So instead, they turn to the cheaper alternative platform known as Pinduoduo (PDD).
In PDD, household products are available at extremely cheap prices. Many of the low-tier towns and cities turn to Pinduoduo in search of cheap products at convenient services. While the company is successful in taking the Chinese market by storm, it also faces some serious trouble for its unauthorized online shops.
It has been selling unauthorized series of products. The frequent occurrence of which especially of sex and violent products are causing confidence crisis. It is a clear breach of the protection of intellectual property rights. There have been 248 Chinese companies that sued the startup for its violations.
Since the noticeable increase in active users of PDD, many companies go to Pinduoduo’s office for a demonstration. They have successfully exposed many problems of the startup’s platform management and operation model. For this reason, PDD is hard to IPO in China. With its low price as well as false, tempting information to attract consumers, its business model is an obvious no “China Costco + Disney.”
But even though the startup doesn’t seem like a good deal for most of the Chinese market, the Pinduoduo IPO on NASDAQ is on its way. Based on the latest IPO valuation update of Pinduoduo, its IPO registration documents indicate an offering of 85.6 million ADSs. It has tremendous growth rate, which appears it has a strong IPO in the US.
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