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JD.com plans US$1.5 billion offensive against Pinduoduo in budget segment as e-commerce competition heats up in China

  • Chinese e-commerce giant JD.com is hammering out details of a multibillion-yuan subsidy campaign to be launched next month, sources said
  • The move marks JD’s first major business initiative by founder Richard Liu since taking back the reins of his empire after settling a rape case in the US

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A display for Chinese online retailer JD.com at the China International Fair for Trade in Services in Beijing in September 2022. Photo: AP Photo
Ben Jiangin Beijing
Chinese e-commerce giant JD.com is launching a 10 billion yuan (US$1.5 billion) subsidy campaign in early March to compete against rival PDD Holdings, whose budget shopping app Pinduoduo has been on a meteoric rise, according to two people with knowledge of the matter, as China’s e-commerce market slows down.
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The subsidies will cover both JD.com’s self-operated online shops, and storefronts set up by third parties on its platform. The company is still in the process of hammering out the details and readying its system before the campaign begins next month, one of the sources said.

JD.com did not immediately respond to a request for comment on Monday.

JD.com founder Richard Liu Qiangdong emerges from a business meeting in Beijing in January 2018. . Photo: AFP
JD.com founder Richard Liu Qiangdong emerges from a business meeting in Beijing in January 2018. . Photo: AFP
The planned move comes after company founder Richard Liu Qiangdong in December criticised his lieutenants for diverging from a low-price strategy and other strategic missteps, the Post reported earlier.

“Losing the low-price reputation will roil the foundation of our existence,” Liu warned in an internal email at the time, adding that “low prices were the most important weapons responsible for our past success, and they will be essential in the future.”

JD.com’s offensive in the budget segment, a stronghold of Pinduoduo, marks its first major business initiative after billionaire founder Liu settled a civil rape case in the US in October and returned to Beijing to reassert control at the e-commerce empire he founded more than a decade ago.
Pinduoduo has solidified its position in China’s smaller towns, where consumers tend to be more budget-conscious. Photo: Xinhua
Pinduoduo has solidified its position in China’s smaller towns, where consumers tend to be more budget-conscious. Photo: Xinhua

Shanghai-based Pinduoduo first rolled out its multibillion-yuan subsidy programme in mid-2019, a move that has helped the latecomer solidify its position in China’s small towns, where consumers tend to be more price-sensitive.

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