It’s known as the brand that sells sometimes-defective products, in bulk, to less well-off Chinese consumers. But Pinduoduo’s unfashionable reputation hasn’t stopped it from becoming more valuable than its slicker-looking competitor JD.com.
On Thursday, Nasdaq-listed Pinduoduo saw its share price rise more than 12%, reaching a record high of $39.96. That boosted its market cap to $46 billion, surpassing JD.com’s $45 billion. JD.com’s share price closed at $30.72 on Thursday.
Pinduoduo is now the fourth-largest overseas-listed Chinese internet company, behind Alibaba, Tencent, and lifestyle platform Meituan Dianping. Pinduoduo’s inexorable rise comes after its market cap surpassed Baidu in August to become the fifth-largest such company.
Pinduoduo’s total revenue in the second quarter of 2019 surged nearly 170% year-on-year to $1 billion, according to its latest quarterly report. The company’s average monthly active users increased 88% to 366 million across the same period.
Founded in 2015, Pinduoduo is a relative newcomer to China’s hyper-competitive e-commerce sector. But its market strategy, which focuses on cultivating markets and price-sensitive consumers in less-developed areas, has proven wildly successful and drawn the attention of more established competitors who are increasingly facing market saturation and slowing consumption power in developed regions.
One such competitor, Alibaba, reported that more than 70% of its new active annual users were from less-developed parts of China.