Alibaba’s (BABA) dominance in the e-commerce space in China has lately been rattled by numerous domestic rivals, primarily Pinduoduo. While Alibaba caters to the wealthy shoppers, Pinduoduo found its niche target among the low-income population. This fast-growing app, which is today a unicorn, is now hoping to raise at least $1.63 billion from a US listing.
Backed by Tencent Holdings Ltd and Sequoia Capital, the Shanghai-based startup combines bulk-buying business concepts of apps such as Groupon (GRPN). In an SEC filing, the company stated its plans to list its shares on the NASDAQ exchange under the ticker PDD.
Set up by former Google engineer Colin Huang in 2015, Pinduoduo is looking to sell about 85.6 million American Depositary Shares in an IPO, according to Reuters. The price range is set at $16 to $19 per share, which would value the company at around $20 billion. In 2017, the company reported a three-fold increase in its revenue to $261 million though losses more than doubled for the same period. The social e-commerce firm boasts of having 103 million mobile monthly active users at the end of March.
Related: Alibaba continues to invest in Southeast Asia
This stunning growth of Pinduoduo is likely to have an impact on Alibaba. As a retaliatory measure, Alibaba is now focusing on China’s towns and villages by expanding its rural Taobao program. Alibaba has also invested $717 million in an e-commerce company, Huitongda Network, which is known to sell appliances in rural China.
Besides these Alibaba has now released a discount app for budget shoppers. When the enemy arrives, Alibaba will be ready.
Related: Chinese e-commerce mammoth Alibaba plans to list in China
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