Home » Stocks & Shares » Amazon to launch an online store on China’s Pinduoduo e-commerce platform on Monday

Amazon to launch an online store on China’s Pinduoduo e-commerce platform on Monday

  • Amazon chooses Chinese Pinduoduo e-commerce platform to launch its online store.
  • Pinduoduo has become widely popular in China in the past four years.
  • Partnering with Pinduoduo is an evolved strategy for Amazon to cater to Chinese buyers.
  • Jeff Bezos has challenged the U.S Pentagon's decision of awarding JEDI to Microsoft Corp.
  • Amazon has had a sufficiently upbeat year so far in the stock market.

Amazon has been in headlines in the past few weeks. In an earlier announcement, Amazon had announced that it plans on shutting its online store in China. Months after the announcement, Amazon representative stated on Sunday that the start of the new week will see the launch of Amazon’s store on Pinduoduo (a prominent Chinese e-commerce platform). According to the experts, the move can be construed as the first phase of the evolution of Amazon’s China strategy.

Amazon Had Closed Its Online Store In China In July

Amazon had finalized its decision of quitting the Chinese marketplace in July in the wake of fierce competition with the likes of Alibaba, JD.com, and the Tmall marketplace. Since the competitors were of Chinese origin, it was getting increasingly difficult for Amazon to compete well against such platforms.

As part of an evolved strategy for the Chinese market, however, Amazon has now decided to use a global platform to cater to the Chinese buyers. The online retail giant has also collaborated earlier with Tmall to open its Kindle store.

Alibaba and JD.com have had a monopoly over the Chinese e-commerce for years. The gradually rising popularity of Pinduoduo in the past four years, specifically among the middle-class population, however, is slowly starting to pose a threat to that monopoly.

While the news has already been made public, neither Amazon nor Pinduoduo has commented on it so far. Despite the rising popularity of Pinduoduo in China, the quarterly results for the platform were significantly worse than the expectations. The recently announced report highlighted a massive quarterly loss of $11 billion for Pinduoduo. While the e-commerce platform relies on its group buying deals and deep discounts to entice the buyers, heavy subsidies continued to stand in the way of Pinduoduo in challenging the larger competitors.

Amazon Is Committed To Using An Alternative Strategy To Cater To Chinese Buyers

The recent development highlights that CEO Jeff Bezos is serious about applying an alternative strategy for Amazon to make its mark in the Chinese market that is already dominated by giants like Alibaba.

Amazon’s announcement of launching a store on Pinduoduo comes as it battles against the U.S Pentagon in the Court of Federal Claims for its allegedly biased decision of awarding its cloud computing contract worth $10 billion to Microsoft Corp. Share prices for Amazon, however, remained upbeat as of Friday, opening at $1,740 level and closing the week at around $1,746. The year-to-date performance for Amazon has been sufficiently satisfactory as well. The stock started the year at around $1,540 and has printed a high of $2,020 so far in 2019.

About the author

Michael Harris
Michael Harris
I began trading in my early 20's at a local company and since then have combined my knowledge and love of content to become a news writer. I am passionate about bringing insightful articles to readers and hope to add some value to your portfolios!

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