Pinduoduo & their upcoming IPO in China with Matthew Brennan
Matthew Brennan, co-founder of China Channel and host of China Tech Talk, joined us to discuss Pinduoduo, the three year old social ecommerce company backed by Tencent slated for an IPO this year. We discussed the origins of Pinduoduo and why they labelled themselves as the amalgamation of Costco and Disney, their products and services on the mobile app and the business model that powered their rise. We also discussed the backers of the company together with the upcoming IPO of Pinduoduo in NASDAQ.
Here are the interesting show notes and links to the discussion (with time-stamps included):
- Matthew Brennan, Co-founder of China Channel and host of China Tech Talk podcast (chinachannel.co, @mbrennanchina , Linkedin, Wechat:Yowdy-CQ) [0:25]
- Since our last conversation, what have you been up to? [0:30]
- CHat Conference 2018 on 20 and 21 Sep 2018 in Shanghai organized by China Channel and Walk The Chat. [0:32]
- Pinduoduo [1:29]
- Can you introduce Pinduoduo to my audience and what do they do? [1:37]
- The company describes itself as “Costco + Disney” and 3 years old, funded by Tencent and will go IPO soon.
- Colin Zheng Huang, ex Google, born Hangzhou, 38
- What are the products and services from Pinduoduo? [3:03]
- One can understand the “Costco” part of Pinduoduo, but what about the Disney part? [4:58]
- Comments on the diametrically opposite business model of Pinduoduo against Alibaba and JD in China [7:48]
- How does the different stakeholders access Pinduoduo for example, consumers or sellers? [9:04]
- What is the business model for Pinduoduo or alternatively, how do they monetize? [11:14]
- Comments on Pinduoduo’s lack of logistics and fulfillment capabilities unlike JD and Alibaba. [11:39]
- Who are the key investors behind Pinduoduo? [12:09]
- Notable investors: Sequoia Capital, Tencent, IDG
- Why does Tencent have so much interest on Pinduoduo instead of JD? [13:00]
- Some of the early employees from the Wechat team, who are they and have they been influential to Pinduoduo’s growth? [14:14]
- Pinduoduo is planning to go public in 2018 with 85.6 million American Depositary Shares in an IPO at a price range of $16 to $19 each, its filing late on Monday showed. The three-year-old Pinduoduo—which has yet to make a profit—is valued at between $20 billion to $24 billion, higher than its $15 billion valuation in April. Why are they going public? (Reference: Forbes “Chinese Startup Pinduoduo Prepares To Go Public In U.S., But Red Flags Abound”) [15:39]
- Where do you see Pinduoduo go from here? WIll they eventually be independent or be acquired by a larger player (Tencent or JD)? [17:35]
- It has been a phenomenal year for Chinese companies going IPO, and most CEOs are banking their bonuses, will this go into the year 2019? [19:43]
- Reference: How Pinduoduo works by Hans Tung and Zara Zhang
- Can you introduce Pinduoduo to my audience and what do they do? [1:37]
- Closing [22:16]
- Can you recommend a book, podcast or anything else that has impact to your work and personal life recently? [22:30]
- Matthew’s recommendation: Daniel Kahneman “Thinking Fast and Slow”
- BL’s recommendation: Michael Lewis “The Undoing Project”
- How do my audience find you? [23:07]
- Can you recommend a book, podcast or anything else that has impact to your work and personal life recently? [22:30]
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The show is hosted by Bernard Leong (@bernardleong & weibo) and are sponsored by Ideal Workspace (Twitter, Facebook and LinkedIn) with their new Altizen Desk (Twitter, Facebook, Medium). Sound credits for the intro music: Taro Iwashiro, “The Beginning” from Red Cliff Soundtrack.
