Chinese e-commerce giant JD.com has spun off its JD Pingou group-buying business as a separate division, according to a report by Technode. Pingou will be focusing on “social e-commerce” through a tie-in with Tencent’s one billion-user social platform WeChat. From September, WeChat users will be able to access JD Pingou directly through the shopping gateway in the app’s coveted “Discover” section.

In May, JD.com announced that it had renewed a strategic tie-up with Tencent that would afford the company preferred access to WeChat. It will pay Tencent around $800 million U.S. for the three-year deal. Tencent will also take $250 million U.S. in JD.com’s class A shares.

The move indicates that JD.com’s rivalry with group buying and social e-commerce giant PinDuoDuo is intensifying, as the pair compete for market share in lower-tier cities. The target consumers for group-buying platforms are mainly based in third to sixth-tier Chinese cities, where purchasing power may not be as high compared with those living in top-tier cities.

JD.com’s second-hand goods trading platform PaiPai underwent a strategic merger with electronic product recycling platform AiHuiShou in June. The merger came as part of a $500 million U.S. funding round in AiHuiShou, led by JD.com. Estimates say that the new valuation of AiHuiShou is more than $2.5 billion U.S. After the merger, JD.com will become AuHuiShou’s largest strategic shareholder.

JD.com said revenues for Q1 rose 20.9 percent year-over-year to 121.1 billion RMB ($18 billion U.S.), topping the consensus forecast of 120.1 billion RMB. Active customer accounts grew 15 percent from last year to 310 million, helping product revenue grow by 19 percent to $16.2 billion U.S.

In April, Chinese classifieds giant 58.com (NYSE: WUBA) announced the formation of a new business division focused on integration with Tencent‘s billion-user mobile social hub WeChat. The “Social Listing Business Group” (SLG) joins the company’s existing Human Resources Business Group (HRG), Property Services Business Group, Auto Services Business Group, and Local Services Business Group (LBG).

Along with PinDuoDuo, JD Pingou is up against 58 Daojia (AKA, 58 Home), the online-to-offline on-demand local services firm launched by 58.com, which began branching out into group buying in late 2018.

Print Friendly, PDF & Email

Related Articles