Pinduoduo says Chinese consumers show more ‘rational’ buying behaviour during its Singles’ Day sales promotion as sales jump
- Pinduoduo said the consumption philosophy among its users this year appeared to be more ‘rational’, with people buying what they really need
- Pinduoduo said the number of brands and products taking part in its promotion has hit a new high this year
Pinduoduo, the bargain e-commerce app operated by PDD Holdings, is enticing China’s cost-conscious consumers with steep price subsidies during this year’s Singles’ Day shopping festival, as it reported a year-on-year jump in sales in lower-tier cities in the first days of its promotion.
Within the first three days of its Singles’ Day promotion that began last week, the company saw sales in fourth and fifth tier cities up 167 per cent year on year, faster than the 113 per cent growth seen for first tier cities, according to data released by the company and cited widely by Chinese media. The company did not disclose the exact sales figures.
Pinduoduo said the consumption philosophy among its users this year appeared to be more “rational”, meaning that shoppers are buying only what they need rather than spending blindly on aspirational items.
Mothers and the younger generation born after 2000 in third and fourth tier cities have favoured local brands, buying local beauty products, home appliances and sports products from big-name domestic labels. White-collar workers and middle-class consumers in first tier cities are buying more day-to-day goods such as fruit and cat food, as well as digital products.
Pinduoduo said many home-grown brands have become a popular choice for consumers this year, such as Shanghai’s local cosmetics brand Bee&Flower and Li Ning, a Chinese sportswear retailer founded by a former Olympic gymnast.
Pinduoduo, which did not specify the date when its promotion started, said the number of brands and products taking part in the event has hit a new high this year, with more than 20 product categories achieving double the growth of last year.
Alibaba eyes B2B expansion in the US with Las Vegas event, new features
PDD Holdings, which also owns overseas shopping app Temu, has been grabbing market share at home with Pinduoduo from competitors such as JD.com and Alibaba Group Holding in recent years through promotions and inroads into lower-tier cities. Alibaba owns the South China Morning Post.
Pinduoduo said sales for the home textiles category surged by more than 800 per cent year-on-year in the first three days of its Singles’ Day promotion, while growth for some other categories such as fruit, seafood and make-up grew by over 110 per cent.
Rivals Alibaba and JD.com have also been betting on low price strategies during the world’s largest shopping season to woo local consumers, whose budgets have been trimmed by a slow economy.
Alibaba’s Taobao and Tmall Group recorded a more than 200 per cent year-on-year increase in turnover for 1,300 brands, within an hour after its presales started on October 24. Meanwhile, JD.com said user orders and overall transaction volume skyrocketed to over four times last year’s figures within the first 10 minutes of its sales on October 23.
China’s economy grew by 4.9 per cent in the third quarter year on year, higher than the 4.5 per cent rise expected by Chinese data provider Wind, but down from growth of 6.3 per cent year-on-year in the second quarter. The economy has been struggling in the face of a global slowdown, a real estate debt crisis, weak stock markets and lingering supply chain issues in the wake of the pandemic.
Meanwhile, Pinduoduo reiterated the importance it attaches to agricultural e-commerce. It said its campaigns pushed total orders of seasonal agricultural products, such as apples and citrus fruits, to in excess of one million units during the initial stage of its promotion.
