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Amazon’s Newest Partner in China? Alibaba and JD’s Biggest Threat

Amazon is making a play for Chinese consumers with a new online popup store that will run through the end of December.

On Monday, the company announced that it would work with China’s Pinduoduo e-commerce site in launching a dedicated “curated” shop on the popular platform, making about 1,000 products available to Chinese shoppers with “competitive prices, [an] authenticity guarantee and convenient shipping.”

“We look forward to enabling customers to enjoy cross-border shopping through this store, in addition to more deals and tens of millions of products available on z.cn,” an Amazon spokesperson said in a statement, referring to the Pinduoduo website.

Roughly half a year after Amazon decided to shutter its struggling site in China, the online titan is looking for other avenues to woo shoppers in one of the world’s largest consumer markets. Faced with intense competition from Alibaba, China’s own mega-etailer, along with JD.com, Amazon decided to wave the white flag on its e-commerce business in April, focusing instead on promoting its cloud and web services.

Together, the two popular Chinese sites command more than two-thirds of the country’s e-commerce. But Shanghai-based Pinduoduo, a four-year-old startup with 430 million monthly active users, stands to disrupt their dominance. The platform has been gaining traction with rural residents through its deep discounts and group-buying deals. Through social sharing platforms like Tencent-owned WeChat and QQ, shoppers can connect to make purchases as teams, earning them lower prices on products.

Despite hitting its stride with the country’s cost-conscious, Pinduoduo weathered an $11 billion loss in value last week, as the company announced wider than expected quarterly losses. The company cited high competition from rivals with heavy subsidies as a reason for its performance woes. However, Pinduoduo’s stock climbed 4 percent Monday following the news of its popup with Amazon.

Following Alibaba’s record-shattering Singles Day e-commerce sales, Chinese etailers like Pinduoduo are likely looking to ride the wave of end-of-year consumer spending while attempting to make up for losses. A symbiotic short-term partnership with Amazon could stand to benefit both companies, each looking for weaknesses in Alibaba’s seemingly puncture-proof armor.

A Pinduoduo spokesperson said that the popup campaign would enable the site to “offer equal opportunities for our users to access global products,” adding that Pinduoduo was “committed to working with our partners as part of our global outreach to offer best value-for-money products worldwide to our users.”

 

Additional reporting by Jessica Binns.

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