Chinese “social e-commerce” startup Pinduoduo (PDD) raised $3bn in its Series C funding round. This has brought it up to a value of $15bn this month.
The company was founded in 2015 and has around 300mn users, as the third most popular app in the iTunes app store in China. It has more users than the JD app and Alibaba’s Taobao shopping app.
TechNode says the company is especially popular with “low-income users and low-tier cities”. The company says it plans to use $1.58bn of the funding to help market and promote agricultural products from 500 different origins. It will create branding and logistics networks to better market these products to areas outside China’s main cities.
The app sources cheap products and allows users to take advantage of group deals. While the products are said to be of low quality, SixthTone says the deals are known to be “mind-bogglingly cheap”.
PDD offers users the chance to share a deal on social media with the idea that the more people who get involved in the deal, the lower the price will be.
As China’s middle class grows, a gap will perhaps lengthen between the wealthier segment and those who live in more out-of-the-way areas and have lower incomes. This may be a factor in PDD’s success against other options like Taobao and JD, despite complaints about the quality on offer.