![]() JD said all its proprietary automatic cashiers and smart POS machines now accept digital yuan as a payment option and relevant software development kits have made digital yuan compatible. ![]() Internet giant JD has made functionality available across an array of its online and offline assets, including JD’s e-commerce and finance apps, as well as 7Fresh-the fresh food chain supermarket it backs. The app also said it will explore the novel digital yuan payment experience in Beijing’s Winter Olympic Village, which is set to open on Jan 27. Once activated, the function allows users to receive remittances and pay for goods and services with digital currency in WeChat. In a similar vein, Tencent-owned WeChat, China’s largest messaging app and one of the leading payment services, also began supporting the digital yuan last week via the WeChat Pay mobile wallet. The pilot version of the app was rolled out on Jan 4. To link to two services, users need to first submit an identity authentication via the e-CNY app, the digital yuan wallet application developed by the central bank. The transaction value of the digital currency via Meituan also surged 64.4 percent compared with a week ago, the company said, adding that the number of users adding the digital yuan payment option to the Meituan mobile wallet expanded almost twentyfold. Local services company Meituan said the number of digital yuan-denominated payments jumped 42.7 percent after connecting the Meituan app with the e-CNY app, which was developed by the People’s Bank of China, the central bank. Alibaba has now launched a discount version of its Taobao platform, and provided some 10 billion yuan in subsidies for its group-buy service.A shopper pays using e-CNY at a store in Sanya, Hainan province.Įlectronic payments via China’s digital currency have enjoyed a stratospheric rise in a matter of days after the novel payment option was made available across the country’s major mobile apps. PDD’s high performance has pushed Alibaba and JD to shift their attention to the sinking market as well, which is poised to be the next battlefield. While Alibaba and JD put their emphasis on capturing city dwellers willing to pay more for better quality products, PDD began on the other end of the spectrum, selling cheap unbranded goods, agricultural products and groceries. PDD’s cheap prices and wide product range appeal to China’s so-called “sinking market consumers,” (下沉消费市场) a term often used by domestic market analysts and media to refer to lower-tier cities, small towns, and rural areas in China. PDD accomplished its explosive growth due as much to its focus on an under-served market segment as its social commerce innovations. Two of the biggest e-commerce industry players in China, Alibaba and JD, made up the majority of the market cap until PDD pushed its valuation to $70 billion in mid-May. With over 630 million online shoppers, China has the largest and fastest-growing e-commerce market in the world. It also allows PDD to provide a highly personalized shopping experience, built on the back of data gathered via group buying and other social integrations - PDD can recommend users items their friends have purchased, which “helps solve the ‘trust deficit’ of retail in China’s developing cities, where more than 80% of retail is unorganized and consumers rely heavily on social recommendations to initiate transactions.” įollowing is a glimpse of its unique business model, and a close-up on its competitors, partners, strengths and weaknesses. This Facebook-like advertising strategy has reduced marketing costs for PDD sellers, most of whom are relatively small and can’t spare much on advertising. Unlike Alibaba, which has expanded its “search ads” business by acquiring Yahoo, PDD employs “targeted ads” that are closely tailored for each consumer. Targeted advertising: About 80% of PDD’s revenue comes from advertisements. These ‘growth hacks’ range from daily check-in rewards to mini-games like “Duo Duo Orchard” which allows users to water a virtual tree each day until it ‘grows’ large enough that they can receive a box of real fruit. Gamification: PDD employs a range of techniques designed to increase user stickiness and encourage users to share links to the app. PDD users share the deal with their friends via the ubiquitous messaging app WeChat, plugging PDD directly into a powerful advertising network. As PDD users share the deal with more people, they can “price chop” and incrementally bring the price down near to zero if enough people join. Group buying: PDD offers products at a significantly reduced price once a minimum number of buyers sign up for the deal. ![]() ![]() The company accomplished this with a few key social commerce innovations: It sprinted past the trillion yuan GMV mark after less than five years, shattering the 14-year and 20-year records set by Alibaba and JD respectively.
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