China

China's Pinduoduo Expects Online Grocery Sales to Double This Year

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  • The coronavirus pandemic has profoundly changed the way people buy groceries, says the vice president of China's Pinduoduo.  
  • To capitalize on the trend, the company in August launched Duo Duo Maicai, which sells fresh produce.
  • Pinduoduo, the third-biggest e-commerce company in China after Alibaba and JD.com, has its roots in agriculture.

Chinese e-commerce giant Pinduoduo is on track this year to double last year's online grocery sales, a senior executive with the company told CNBC.

David Liu, vice president of Pinduoduo, said the coronavirus pandemic has profoundly changed the way people buy groceries — and that's generated demand for the company in China.

"There is a change in terms of how people want to satisfy their daily grocery needs, and they want more selection," Liu told CNBC's Arjun Kharpal as part of the annual East Tech West conference. "People are also looking for an alternative to the traditional wet markets and supermarkets that they normally have access to."

Pinduoduo "sold 136.4 billion yuan (USD 19.3 billion) of fresh produce on its platform" last year, Liu said. He added the company is "close to doubling that this year."

In August, the company, also known as PDD, launched Duo Duo Maicai, which sells fresh produce.

Duo Duo Maicai let people pre-order groceries online and to pick them up at local outlets. The service helps to shorten delivery time, so consumers can replace fresh produce more quickly.

Pinduoduo, the third-biggest e-commerce company in China after Alibaba and JD.com, has its roots in agriculture, Liu said.

"This is a very natural extension of our e-commerce business to consumers," he said. "It improves their experience on getting access to certain types of fresh produce on our platform at a lower cost. It is very consistent with PDD's core message of delivering our consumers more savings and more fun."

Unlike bigger rivals, PDD does not have an extensive logistics network. The company leases warehouses and works with external delivery companies to iron out the "logistics issues," Liu said.

PDD plans to invest in logistics infrastructure in order to expand Duo Duo Maicai across more provinces in China, Liu said.

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