<h1>Head-to-Head Battle on Double Eleven:</h1>
In 2023, on Double Eleven, Alibaba, JD.com, Pinduoduo, Douyin, Kuaishou, Xiaohongshu... almost all the e-commerce giants in China have joined the low-price competition. This kind of fierce battle is an unprecedented scene in the Chinese internet industry. All-Weather Technology will present the aspects of multiple companies in this battlefield, observe and predict the development and trends of the industry.
Author: Huang Yu
Editor: Zhang Xiaoling
In 2023, the landscape of the Chinese e-commerce market has changed. Liu Qiangdong and Jack Ma, the two big shots who returned to China one after another, have encountered a formidable opponent, Pinduoduo.
Although the founder Huang Zheng has retired, this emerging e-commerce giant's GMV (Gross Merchandise Volume) this year may have surpassed JD.com and is closing in on Taobao.
The performance growth has driven Pinduoduo's stock price to repeatedly hit new highs, and it has also caused Huang Zheng's net worth to skyrocket. On October 24th, the 2023 Hurun China Rich List was released, and 43-year-old Huang Zheng entered the top three for the first time with a net worth of 270 billion yuan. The former richest person, Jack Ma, has fallen to tenth place, and Liu Qiangdong and his wife have slipped to 66th place.
As the two giants in the domestic e-commerce field, Alibaba and JD.com have been shining for years, and there are few who can truly threaten their positions. Until the rise of Pinduoduo, it gradually evolved into a three-way competition.
In this Double Eleven, although there was no direct confrontation, Taobao and JD.com both regarded Pinduoduo as the &#34;biggest enemy&#34; and returned to being &#34;price killers&#34;, offering &#34;billions of subsidies&#34; and joining the battle for user mindshare.
Pinduoduo, on the other hand, has put up a sign that says &#34;Everyday 11.11, Everyday Low Prices&#34;, seemingly responding to this annual promotion with a more composed attitude. The controversies over counterfeit products and suspicions of fake goods have become the hidden side, the hidden worries that this rising star must resolve.
Pinduoduo, the dark horse that emerged eight years ago, tore open a crack in the e-commerce market dominated by Alibaba and JD.com, achieving a miraculous comeback.
And this is also a symbol of the endless opportunities in the vast e-commerce industry. The battle continues, and miracles will continue to happen.
<h2>The Comeback</h2>
&#34;Liu Qiangdong will also grow old slowly. I find it hard to believe that thirty years from now, the entire e-commerce industry in China will still be dominated by these big shots.&#34; In the second year of founding Pinduoduo, Huang Zheng was full of passion and released his ambition to disrupt the industry.
In just seven years, the challenger who wanted to break the old world order has become the person standing at the top of the pyramid. Huang Zheng has surpassed Jack Ma and Liu Qiangdong at a surprising speed, becoming the richest tycoon in the Chinese e-commerce industry.
According to the Hurun China Rich List, Huang Zheng ranks third, with the top two being Zhong Shanshan, the 69-year-old founder of Nongfu Spring, and Ma Huateng, the 52-year-old founder of Tencent.
Meanwhile, the former richest person in China, Jack Ma, has now fallen to tenth place, and Liu Qiangdong, who Huang Zheng sees as his target to catch up with, has dropped to 66th place, with a net worth only a fraction of Huang Zheng's, about 60 billion yuan.
Huang Zheng's personal wealth has greatly increased, thanks to the rise in Pinduoduo's stock price.
Although he has stepped back from Pinduoduo, Huang Zheng remains the largest shareholder, with a stake of approximately 26.5% as of the end of February 2023.
Over the past year, Pinduoduo's stock price has performed impressively, rising by over 45%, making it a &#34;shining star&#34; among many investors. As of the close on October 25, 2023, Pinduoduo's stock price was approximately $107.49 per share, with a total market value of about $142.8 billion, equivalent to three JD.coms and nearly two-thirds of Alibaba's market value.
During the same period, the growth of the domestic e-commerce industry and successful expansion into overseas markets have driven the strong growth of Pinduoduo's stock price.
According to the financial report, Pinduoduo's revenue in the second quarter of this year was approximately 52.3 billion yuan, a year-on-year increase of 66%, the highest growth rate in nearly 8 quarters. This high growth rate not only leaves competitors Alibaba and JD.com far behind, but also makes it the fastest-growing large Chinese tech stock.
While experiencing rapid revenue growth, Pinduoduo has also achieved substantial profits. In the second quarter of this year, Pinduoduo's operating profit was approximately 12.7 billion yuan, a year-on-year increase of 46%; its net profit attributable to shareholders was approximately 13.1 billion yuan, a year-on-year increase of 47%.
In a situation where the incremental growth of the domestic e-commerce industry has peaked, Pinduoduo has also begun to seek a second growth curve in overseas markets.
A year ago, Pinduoduo's overseas version &#34;Temu&#34; entered the blue ocean of cross-border e-commerce like a catfish. With its fully managed model and low-price strategy, it quickly went online in 47 countries worldwide, ranking among the top ten in global app downloads and becoming one of the most downloaded apps in the United States.
The strong momentum of TEMU's development has also made the capital market optimistic about Pinduoduo's future growth potential, driving the increase in its stock price.
Internet analyst Yu Bin also stated that Pinduoduo's top management's accurate decision-making, such as the billion-yuan subsidies, Duo Duo Mai Cai (Pinduoduo's grocery delivery service), and overseas Temu, have almost never failed and have always maintained a leading position in the industry. After the previous core project entered a stable period, they always manage to find the next business breakthrough point in a timely manner. This is the reason why its stock price repeatedly reaches new highs.
From a business model perspective, since its establishment in 2015, Pinduoduo has rapidly risen by relying on the overlooked sinking market and white-label merchants by Alibaba and JD.com, as well as its low-price strategy. Three years after its founding, Pinduoduo went public on Nasdaq, while Alibaba took five years and JD.com took ten years.
In the wave of consumer downgrading, Pinduoduo, with its solid low-price reputation built over the years, has not only attracted price-sensitive consumers but also attracted many middle-class consumers.
In contrast, Ma Yun's Taotian and Liu Qiangdong's JD.com have failed to withstand the tide of consumer downgrading, resulting in a sharp decline in their stock prices and a significant reduction in personal wealth.
Defending the Title
The rise of the e-commerce newcomer Pinduoduo has made both Alibaba and JD.com, the two e-commerce giants, feel a strong threat.
According to third-party estimates, in 2022, the GMV of Taobao and Tmall reached 82 trillion yuan, JD.com reached approximately 34.7 trillion yuan, and Pinduoduo has already reached 32 trillion yuan. Given the current market development, JD.com's position as the industry's second is in jeopardy.
Alibaba and JD.com will certainly not sit idly by and let Pinduoduo, which emerged out of nowhere, take their place. They have also humbled themselves to learn from Pinduoduo and set their sights on the lower-tier market. This year, they have also firmly implemented a &#34;low-price strategy&#34;.
It can be seen that at the end of last year, Liu Qiangdong internally emphasized that &#34;low price is the only fundamental weapon&#34;; this year, Jack Ma, who returned to China, proposed &#34;Alibaba's return to Taobao&#34; at an internal communication meeting in May to reverse the consumption upgrade strategy that has been dominated by Tmall for the past decade.
This year's Double 11 is a moment when the three giants directly compete. JD.com and Li Jiaqi sparked a dispute over the pricing of an oven, unveiling the fierce competition of this &#34;Double 11 battle&#34;.
For both Taotian and JD.com, this year's &#34;Double 11&#34; is particularly important. It is a test of the effectiveness of their new round of organizational structure adjustments and also the best window to show the world who will win the title of &#34;the lowest price on the entire network&#34;.
Taotian has clearly identified &#34;the lowest price on the entire network&#34; as the core KPI for this year's Double 11, while JD.com has shouted the slogan &#34;genuinely cheap&#34;. Both companies have also launched the &#34;billion-yuan subsidy&#34; that used to belong to Pinduoduo.
Pinduoduo also needs to show more sincerity in this battle in order to defend its core advantage as the king of low prices. According to Wall Street News, Pinduoduo's billion-yuan subsidy was also launched for the first time on October 23rd, using the &#34;single-item discount&#34; gameplay. In addition to the subsidy, Dodo Pay, its subsidiary, also offers additional price reductions.
Pinduoduo emphasizes that there is no upper limit on the additional official subsidies; in addition, the person in charge of Pinduoduo's billion-yuan subsidy also told Wall Street News that compared to last year's major promotion, the brand product pool for this year's billion-yuan subsidy is expected to grow by 110% YoY.
Huang Fuxiaohan, an analyst at Zhongtai Securities, believes that although platforms such as Alibaba and JD.com have gradually begun to emphasize &#34;price power&#34;, the low price is backed by a platform's ecosystem, including the internal relationships of the company as well as external merchants and customers, making it relatively difficult to adjust.
Therefore, Huang Fuxiaohan expects that in the future, Pinduoduo's growth rate will still be higher than the industry average, especially during periods of weak economic cycles.
However, although it is difficult to shake Pinduoduo's position in the &#34;outside the Fifth Ring&#34; market in the short term, even in terms of pure price competition, Alibaba and JD.com's low-price strategy will also have a certain impact on Pinduoduo. Faced with the encirclement of the two traditional e-commerce giants, Pinduoduo's discounts on some individual products may appear to be less attractive.
Pinduoduo also has its own limitations and hidden concerns. This year, some merchants launched &#34;store bombings&#34; due to dissatisfaction with the platform's biased &#34;refund only&#34; mechanism for users. Under the low-price strategy, finding a balance between protecting consumer and merchant rights and interests is a challenge that Pinduoduo needs to overcome.
In the year of its listing, Huang Zheng once declared that &#34;Pinduoduo will surpass JD.com in three years and fight against Alibaba in ten years&#34;, which was seen as an arrogant statement at the time, but now it has almost been half fulfilled.
With the solid low-price mindset cultivated over the years, Pinduoduo has gained a certain advantage in the current economic environment, but the intensified competition in the e-commerce industry poses challenges for Pinduoduo. With JD.com and Alibaba in the front and Douyin, Kuaishou, and other live-streaming e-commerce platforms chasing from behind, the new e-commerce landscape is still full of variables.

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He has become a formidable rival to both JD.com and Alibaba.