In the sinking market with the fiercest competition, the fight between Pinduoduo and Ali, JD.com and Suning is becoming fiercer.
Editor’s note: This article comes from the WeChat public account “Yiouyi” (ID: i-yiou) author: Liang Xi Li.
Pinduoduo and Gome joined forces to add more gunpowder to the battle between e-commerce platforms.
Similar to Suning and Alibaba ’s group, the alliance between Pinduoduo and Gome also brought new changes to the competitive landscape of the entire industry.
On April 17, Pinduoduo announced that it would subscribe for US $ 200 million of convertible bonds issued by Gome Retail, with a term of three years and a coupon rate of 5% per annum. If all the conversion rights are exercised in the end, Pinduoduo will be allocated up to 1.28 billion Gome shares, accounting for approximately 5.62% of the enlarged share capital of the latter’s issued conversion shares.
At the same time, many cooperation issues will also be reached. Including Gome retail full-scale merchandise on shelves, brand home appliances will be connected to Pinduoduo’s “10 billion subsidy” plan.
Anxun Logistics (with over 6,000 service outlets nationwide) and Gome Butler, two service platforms of Gome, will simultaneously become Pinduoduo logistics and home appliance service providers, respectively providing Pinduoduo platform merchants with a nationwide coverage Parts logistics, warehousing and delivery services, as well as consumer service providers including home appliance repair-cleaning and maintenance-trade-in.
Pinduoduo will inject digital retail resources such as consumer trending big data and platform traffic into Gome, which is exactly what the business model has to do with the traditional Gome.
Affected by this good news, Gome’s share price rose by nearly 33% to HK $ 0.97 on April 20. As of press time, the increase fell to 16.44% to HK $ 0.85.
Second marriage
Gome once cooperated with Pinduoduo for the first time in 2018, and was once regarded as “next married” by the industry. However, “next marry” or “high climb” is all a positive self-help of Gome after falling behind from the first echelon of retail.
Gome, which is undergoing transformation and transformation, regards the sinking of third- and fourth-tier cities as an important force, but the effect is not significant, the number of stores continues to decline, and the plan is weak.
Cooperating with Pinduoduo, who has already been able to do well in the sinking market, Gome ’s intentions are also very obvious—accelerating reaching consumers in lower-tier cities.
Pinduoduo’s 2019 financial report shows that the 2019 Pingduodu GMV reached 1006.6 billion yuan, surpassing one trillion yuan, an increase of 113% compared with 471.6 billion yuan in the same period last year.
The sinking is weak, and Gome ’s desire for online traffic is equally urgent. Not only with Pinto