Welcome back to TechCrunch’s China roundup, a digest of the latest events that happened at major Chinese tech companies and what they mean to tech founders and executives around the world.
Alibaba’s new rival is shaking up China’s internet landscape.
This week, four-year-old e-commerce upstart Pinduoduo displaced JD.com to be the fourth-most valuable internet company in the country. Its market capitalization of $47.6 billion on Friday put it just behind e-commerce leader Alibaba, social networking behemoth Tencent and food delivery titan Meituan in China. Baidu, the search equivalent of Google in China, has fallen off the top-three club, ending a decade of unshakable dominance of Baidu, Alibaba, and Tencent (the “BAT”) on the Chinese internet.
The story of Pinduoduo comes down to growing internet penetration and the rise of social commerce. Pinduoduo, which is known for selling ultra-cheap products, is particularly popular with price-sensitive residents in small towns and rural regions, a market relatively underserved by online retail pioneers Alibaba and JD.com . However, Pinduoduo has set about targeting more urban consumers by heavily subsidizing big-ticket items such as iPhones.
Its seamless integration with WeChat, the ubiquitous messaging app owned by Pinduoduo investor Tencent, contributes to adaptability among a less tech-savvy population. WeChat users can access Pinduoduo via the messenger’s built-in lite app, skipping app downloads; they also get deals from group-buying, thus the name Pinduoduo, which means “shop more together” in Chinese.