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Pinduoduo Buys Into Home Appliance Retailer to Sell Their Branded Goods.

By Ding Yi / Apr 20, 2020 12:52 PM / Business & Tech

Photo: VCG

Photo: VCG

Chinese e-commerce upstart Pinduoduo has agreed to subscribe to $200 million in convertible bonds issued by home appliance retailer Gome in exchange for the right to sell the latter’s branded products on its own platform.

In return, products sold on the Gome platform including those made by big names such as Siemens, Sony and Haier will be available on the Pinduoduo platform at lower prices, according to a statement issued by Pinduoduo on Sunday, adding that Gome will also integrate its logistics, delivery and assembly services with Pinduoduo to enhance user satisfaction.

In a separate statement emailed to Caixin Pinduoduo said; “With the strategic partnership, we expect Gome’s offline retail stores to become an extension of the shopping experience for Pinduoduo users who may want to touch and feel and see demos in person before making a big-ticket item purchase online through the platform.”

Pinduoduo gave additional details about the share subscription in their public statement saying the bonds will carry a coupon rate of 5% per annum with a tenure of 3 years, which Pinduoduo can opt to extend by two years. They are convertible at HK$1.215 per share, and 1.28 billion Gome shares, or about 5.6% of its existing issued share capital, will be alloted.

The announcement about the bond subscription comes less than a month after the two companies jointly held a sales promotion to give away 500 million yuan worth of discounts and consumption subsidies on more than 6,000 items including household electronics, computers and cosmetics.

Contact reporter Ding Yi (dingyi@caixin.com)

Related: Cash-Burning Pinduoduo Raises $1.1 Billion to Finance Growth


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