[Asia Economy Reporter Lee Ji-eun] Pinduoduo, China's largest e-commerce company, is reportedly preparing to enter the North American market amid a domestic market downturn.
On the 22nd (local time), Bloomberg News cited multiple sources reporting that Pinduoduo is preparing to establish corporate partnerships for its entry into the North American market. Bloomberg stated that Pinduoduo is seeking new growth engines as the Chinese economy cools down, choosing a strategy similar to that of Chinese fashion platform Xuan and online shopping mall AliExpress.
Despite being a latecomer, Pinduoduo has rapidly expanded its presence in the fiercely competitive Chinese internet retail market, attracting attention. It has secured 880 million annual users and succeeded in listing on the US Nasdaq just three years after its founding in 2018. According to eMarketer, Pinduoduo holds a 13% market share among Chinese online companies, following JD.com’s 16.9%.
The reason they are turning their eyes to the US despite rapid growth is the need to find new growth drivers outside the domestic market due to China’s economic recession. Alibaba, the parent company of Pinduoduo’s competitor AliExpress, also recorded a decline in second-quarter sales for the first time ever due to China’s economic slowdown. Bloomberg explained, "The US market will be an attractive outlet where China’s existing infrastructure and commercial networks can be used internationally."
However, the risk of delisting stemming from the US-China dispute is a concern. The US Securities and Exchange Commission (SEC) announced that about 100 Chinese companies have been placed on a preliminary delisting list under the Foreign Company Accountability Act, which has been enforced since last year. This act prohibits securities trading for companies that fail to meet US accounting standards for three consecutive years and is considered a key anti-China policy of the previous Donald Trump administration. Currently, Pinduoduo, along with Alibaba, is on the preliminary delisting list.
Bloomberg also forecasted that Pinduoduo might pursue listing on the Hong Kong or nearby exchanges to avoid such risks.
Meanwhile, recent media reports have indicated that Pinduoduo plans to launch an application (app) for use in the US next month and has reassigned senior executives and personnel to lead this effort.
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