JD Launches Jingxi to Compete With Pinduoduo in Lower-Tier Cities

China’s second-largest online retailer has developed its own discounter platform to rival Alibaba and Pinduoduo in lower-tier cities.
Belinda ZhouSep 21,2019,06:55

JD.com Inc. (Nasdaq: JD) officially launched and named its social e-commerce platform as “Jingxi” Thursday, answering to Pinduoduo Inc. (Nasdaq: PDD) and Juhuasuan backed by Alibaba Group Holding Ltd. (NYSE: BABA).

“Jingxi”, developed by China’s second-largest online retailer JD.com, refers to surprise in Chinese. JD.com launched its group-buying business in March 2008 and integrated its mobile app, small program and WeChat shopping portal into “Jingxi.”

Jingxi targets users in small and medium-sized cities in China, sharing overlapped users and shopping experience of team purchase format with Pinduoduo and Jusuansuan.

“We're going to diversify and enrich our WeChat ecosystem and provide -- provide a new model that attract lower-tier cities, especially the female users and low-income users,” Lei Xu, the chief executive officer of JD Retail, said on the conference call in August.

Chicago-based Groupon created the idea to leverage large number of people's collective bargaining power via social media. Buyers who share product information on popular social networks and invite their friends, family and social contacts to purchase together will be rewarded with discounts through Pinduoduo, Juhuasuan and so on in China.

“In the future, we'll continue to enhance our user experiences and also gain more potential customers from third to six-tier cities,” Richard Liu, chairman and the chief executive officer of JD.com said.

The Beijing-based e-commerce emphasized it wants to bet in the potential of lower-tier cities. “Not only on the new WeChat platform but also on logistics that we actually intend to further penetrate down into those lower-tier cities areas, to enhance customer experience,” Xuande Huang, the chief financial officer of JD.com said in the call.

Shares in Pinduoduo have been on a wild ride since July so that the company's market capitalization has come close to that of JD.com and then calmed down this week. The market cap of JD.com was $45.1 billion as of Friday, outweighing Pinduoduo's $39.6 billion. Alibaba see its gap with JD.com narrows to less than $3 billion, with its market cap at $47.5 billion on Friday.

Shares in JD.com didn’t change on Friday, closing at $30.94 per American depositary share.