Sun, Jul 01, 2018 - Page 16 News List

Pinduoduo files for US$1bn US IPO

Bloomberg

A man walks past the New York Stock Exchange on April 5.

Photo: AP

A Chinese e-commerce site called Pinduoduo (拼多多) is planning to raise at least US$1 billion in a US initial public offering (IPO), as it fights for market share against giants including Alibaba Group Holding Ltd (阿里巴巴).

The Shanghai-based firm last year saw revenue more than triple to US$278 million, according to its filing to the US Securities and Exchange Commission, under the name Walnut Street Group Holding Ltd (核桃街集團控股).

Losses rose 55 percent to US$79.5 million, while transaction volumes reached 141.2 billion yuan.

Pinduoduo has become one of the fastest-growing start-ups in China by creating a sort of mashup between Facebook and Groupon, where people spot deals on products, such as fruit, clothes or toilet paper, and then recruit friends to buy at a discount.

It offers merchandise at up to 20 percent cheaper than market price by letting consumers buy directly from manufacturers, cutting out intermediaries, advertising and acquisition costs.

The company was founded by ex-Google engineer Colin Huang (黃崢) and counts Tencent Holdings Ltd (騰訊) and Sequoia Capital China (紅杉中國) as backers.

Pinduoduo saw its valuation jump about 10 times in its previous round of fundraising in April.

It raised more than US$1 billion, at a valuation of about US$15 billion, people familiar said at the time.

Besides its reputation for low prices, Pinduoduo has benefited from a large base of users in lower-tier Chinese cities.

Its daily active users surpassed that of JD.com (京東) in January and reached 55.9 million in June, according to research from Shenzhen-based consultant Jiguang.

Alibaba’s Taobao (淘寶) app had 172 million daily active users and JD 34.3 million, it said.

Huang launched his career in Silicon Valley and then returned home to become a serial entrepreneur.

His app is supposed to be more like a digital version of shopping at the mall with friends, where you can share ideas and get feedback from people you trust.

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