Partnering with Gome, Pinduoduo aims at deploying its own logistics ecosystem

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Encouraged by the news, shares of Gome opened over 30 percent higher on Monday and closed at HK$ 0.85 on the day, up 16.44 percent.

As a traditional offline retailing giant, Gome has been stepping up going online efforts in recent years. However, it did not turn out very well. Its offline sales still contributed as highly as 83 percent to its total revenue last year. Via the partnership, the electronics retailer will gain access to Pinduoduos nearly 600 million users.

Through the cooperation, Anxun Logistics under Gome, which has over 6,000 offline service sites, will be a logistics service provider for Pinduoduo as well. It is noticed that this is the first time for Pinduoduo to deploy medium and large package logistics service.

But with orders keep increasing, it is vital for Pinduoduo to keep up by deploying its own logistics system. In addition to the partnership with Gomes Anxun Logistics, Pinduoduo is also reportedly to have talks with JT Express over cooperation.

The cooperation also presents a chance for Pinduoduo to increase single order price and spending of active buyers through selling electronics products, as the companys 50 percent gross merchandise value (GMV) comes from apparel and st-moving consumer goods and 13.5 percent GMV from agricultural products.

In recent years, the number of packages on Pinduoduo is seeing spiking. Last year, the number of parcels generated through Pinduoduo totaled 19.7 billion, an increase of 77 percent year on year, accounting for one-third of businesses of delivery companies across the country, according to its financial statement.

Besides, Pinduoduo is to sell products of Gome, while Gome, in turn, will share its logistics and after-sales service network with Pinduoduo.