Chinese e-commerce company Pinduoduo (Nasdaq: PDD) confirmed with KrASIA on Friday that a batch of over 50 automobiles, which includes luxury crossovers such as the Cadillac XT5 model, will be put up for sale on its platform during a shopping festival on May 5.
Pinduoduo will also offer discounts of about 100,000 yuan (USD 14,115) on selected car models, including the Cadillac XT5, which starts at RMB 329,700 yuan (USD 46,538), and the Volkswagen Tiguan, said a Pinduoduo spokeswoman.
The 55 cars to be sold on Pinduoduo all come from Shanghai-based automaker SAIC Group, which manufactures and sells Cadillac and Volkswagen brand cars for the China market.
Shanghai-headquartered Pinduoduo has already proven to be a good online platform for selling budget cars, but is now exploring the market for high-end vehicles.
On June 18, 2019, Pinduoduo sold over 400 multi-purpose vehicles by SAIC-Wuling, a joint venture backed by SAIC Group, in 18 seconds, and 387 Chery EQ1 in one minute through its team-purchase model, according to data provided to KrASIA by Pinduoduo’s spokeswoman. In addition, on November 11, 2019, 1,000 cars from SAIC-Wuling, MG Motors, and Borgward, were sold in 16 minutes.
She mentioned that car sales in China were badly hit by the COVID-19 pandemic and dropped by 48.4% year-on-year (YoY) in March, citing data of the China Association of Automobile Manufacturers.
Overall, auto sales in China, the world’s largest automobile market, shrank 8.2% in 2019 to 25.8 million units when compared to 2018, dropping for the second year in a row. In 2018, auto sales suffered its first decline since 1990, down 2.8% YoY to over 28 million units, KrASIA reported.
“Pinduoduo likes to team up with whoever has encountered a difficult and tough time,” Cecilia Xu, an analyst with 36Kr Research, a market research unit of 36Kr, told KrASIA on Friday, adding that “vendors whose products do not sell well on Taobao could all become Pinduoduo’s clients.”
“As long as Pinduoduo has access to these products, the company will spend heavily on promotion,” Xu said.
Earlier this week, Pinduoduo made news after setting up a strategic partnership with Gome, which used to be China’s largest electronics retailer but has lagged behind in the e-commerce era. Pinduoduo will subscribe to USD 200 million in convertible bonds to be issued by Gome as part of the partnership and will move the retailer’s entire product range to its platform, which includes domestic and international brands like Haier, Midea, Toshiba, and Siemens.
Pinduoduo has been enriching its offering to try to change consumer’s perception about the brand, which has been mainly recognized as a marketplace favored by housewives hunting for a bargain and users living in China’s smaller cities and rural areas.
Huang Zheng, chairman and CEO of Pinduoduo, emphasized the diverse range of products the platform offers to analysts attending the company’s November earnings call conference. On Pinduouo, users can find both apples and Apple iPhones, he said.
Pinduoduo is one of the companies to take part in the May 5 shopping festival, an event that will be hosted by the Shanghai government to boost consumption, featuring online platforms and brick-and-mortar stores offering products with heavy discounts to netizens, said Pinduoduo.
36Kr is KrASIA’s parent company
