July 3, 2018
While Alibaba-owned Taobao and T-Mall and Tencent-owned JD.com dominate Chinese e-commerce, a newer entrant is planning a U.S. IPO that observers expect will net at least $1 billion. Pinduoduo has used a model combining the social aspects of Facebook and the group-buying characteristics of Groupon to create one of the fastest-growing startups in China. According to a Bloomberg News report, its nearly 60 million daily active users surpassed those on JD.com in January of this year.
The company’s revenue more than tripled in 2017 to $278 million, but it lost nearly $80 million last year. The company was founded in 2015 by Colin Huang, a former software engineer at Google. Tencent, JD.com’s parent, is an early investor of Pinduoduo, whose parent company, Walnut Street Group, has raised more than $1 billion since its launch.
According to experts, Tencent’s backing of Walnut Street Group is critical, as most of the users make group deals through WeChat.