---
title: "Pinduoduo Meets Its Match in Beijing, Shanghai, and Guangzhou"
description: "1688, Alibaba's B2B platform, is gaining popularity among young consumers seeking affordable alternatives to big brands. With low prices and a vast selection, it has become a go-to for cost-conscious shoppers, leading to a surge in social media buzz and a strategic elevation within Alibaba."
author: "关注大公司的DT"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-04-03"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/pinduoduo-meets-its-match-in-beijing-shanghai-and-guangzhou-8771277f/"
markdown: "https://xinjignxiao.com/en/articles/pinduoduo-meets-its-match-in-beijing-shanghai-and-guangzhou-8771277f.md"
original_source: "https://mp.weixin.qq.com/s/hTQ1757D7qJniNxxqi4-pA"
translation: "https://xinjignxiao.com/zh/articles/%E6%8B%BC%E5%A4%9A%E5%A4%9A%E5%9C%A8%E5%8C%97%E4%B8%8A%E5%B9%BF%E9%81%87%E5%88%B0%E4%BA%86%E7%8B%A0%E4%BA%BA-8771277f.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/pinduoduo-meets-its-match-in-beijing-shanghai-and-guangzhou-8771277f/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Pinduoduo Meets Its Match in Beijing, Shanghai, and Guangzhou

> 1688, Alibaba's B2B platform, is gaining popularity among young consumers seeking affordable alternatives to big brands. With low prices and a vast selection, it has become a go-to for cost-conscious shoppers, leading to a surge in social media buzz and a strategic elevation within Alibaba.

1688 is having a moment. The secret to its popularity is simple: **cheap enough.** Socks for under 50 cents, toothpaste for 70 cents, Sam's Club snack dupes at 30% of the price, and big-brand clothing alternatives at half price... Young people who hear about it are calling it a steal. Word of mouth has spread, and on Xiaohongshu, the hashtag #1688购物分享# (1688 Shopping Hauls) reached 2.95 billion views in 2024, with nearly 2 million posts. In January 2024, daily searches for "dupe" (平替) on 1688 were still growing rapidly, with the number of searchers up 1821% year-over-year and search count up 1587%. External discussions are heating up, and internally, there's a new mission. At Alibaba's Q4 2023 earnings call, CEO Eddie Wu announced that 1688, along with Xianyu, DingTalk, and Quark, would be elevated to the status of Alibaba's first batch of strategic innovation businesses, becoming the new "Four Little Dragons." For a long time before this, 1688 had been far from the spotlight. As the eldest son of the group, born in 1999, it focused on B2B wholesale. In terms of growth, it couldn't match Taobao or Tmall; in innovation, it was less noticed than Alipay; and when it came to commercial imagination, its staid image didn't seem to fit. So why is 1688 suddenly popular? Let's trace its major milestones and see what challenges it faces in the current e-commerce landscape.

**The Eldest Son Seeks Change** In Alibaba's early days, the company's business model was to provide yellow-page services for professional buyers and factory sellers. At that time, 1688 was mainly responsible for endorsing factories and finding buyers, essentially doing information matching and charging membership fees. By 2009, 1688, as the main force, had strong cash-generating ability and followed Alibaba in its conquests. It and Alibaba International Station were listed in Hong Kong under the name B2B company, once named after the stock code on the Hong Kong main board, becoming a prominent and popular symbol. In 2012, Alibaba's B2B was privatized and delisted, the B2C wave rose, Taobao accelerated its takeoff, and annual GMV approached one trillion. The eldest brother, 1688, faced a key turning point—transforming from an information matching platform into a wholesale e-commerce trading platform, assisting the second son, Taobao, as a growth booster. In business terms, 1688 integrated with Taobao's backend and innovated the "one-piece drop shipping" model, allowing factory sellers to wholesale goods to Taobao with one click, solving Taobao's supply source problem and bringing factories stable business. Within a year or so of this change, 1688 became the largest source of goods for small and medium sellers, with transaction volume growing from zero to over 100 billion. Despite these solid achievements, it must be said that during the years of expanding Taobao, 1688 remained on the periphery. It focused on online wholesale, acting as a 24/7 online Canton Fair and online Yiwu small commodities market, a strong supporter of Taobao and Tmall. At the same time, as the group's supply mothership, 1688 also attempted to explore new businesses. For example, it tried self-operated organization of industrial belt goods with Yuan Niu, and later Retail Link, which paved the way for Taocaicai, but most ended in mediocrity. The situation changed in 2017. That year, Alibaba continued its sprint, and the ideas of Taobao's big promotions and product operations were brought to 1688. It established its own advertising and marketing system for the first time, adding advertising revenue on top of membership fees. With two legs to stand on, 1688's GMV nearly doubled that year, and for the next five years, it maintained a year-over-year growth rate of over 30%.

**Unexpected Popularity** The real turning point that left a mark on consumers' minds was 2020. The pandemic made consumers rational. Because of source factories and no middlemen taking a cut, 1688 broke out on Xiaohongshu against the trend, gaining a batch of C-end fans and starting to become popular. Data supports this. According to iyiou.com statistics, in the first half of 2020, the proportion of young buyers aged 20-30 on the 1688 platform began to rise, jumping from 30% in the same period in 2019 to nearly 40%. QuestMobile data shows that in the first half of 2020, 1688's monthly active users increased by 82.14% year-over-year. According to Qiangua data, among Xiaohongshu posts related to "1688," clothing-related posts were the most numerous, with outfit posts accounting for 22.92%, followed by children's fashion, accessories, and bags. Home goods and home decor were another highly watched category. People call girls who buy clothes on 1688 "1688 girls." They mostly prefer Korean-style affordable outfits, focus on good quality and low price, and are keen on finding dupes for light luxury brands to achieve commuting wardrobe freedom. For home goods, from tableware, storage, to phone cases, pet toys, and other small items, young people just want good quality at a reasonable price—enjoying the daily thrill of scoring a deal while adhering to a "pragmatic" shopping philosophy. Combining Xiaohongshu posts and 1688 product prices, there are three reasons young people favor 1688: cheap, practical, and a wide SKU range—1688's SKUs exceed 100 million, covering all categories of daily life and matching supply with demand. Take 1688's Sam's Club snack dupes as an example: even without a membership card, you can buy the same products at a good price on 1688. For instance, one wasabi macadamia nut snack, at the same weight, costs only half the original price. Additionally, among Xiaohongshu posts mentioning 1688, besides shopping for personal use, doing blogger recommendations, opening small stores, and one-piece minimum orders are also main reasons young people use 1688. A typical example is a money-saving blogger on Xiaohongshu. In 2020, she gained followers by compiling "treasure factory lists" for various categories, and sharing "insider analysis" posts like hair accessory freedom and buying cashmere coats from industrial bases. After gaining enough followers, she opened a store on Xiaohongshu, transitioning from a C-end fan of 1688 to a small B user. In terms of city distribution, 1688's C-end consumers mainly come from first- and second-tier cities, with 48.8% being Gen Z aged 25-30 and 44.9% being new middle class aged 30-35. This user profile is similar to that of Xiaohongshu's audience.

**Becoming One of the New Four Little Dragons** According to data, in 2023, 1688's revenue was about 20 billion RMB, with annual transaction volume of about 800 billion RMB. About 97% of the platform's GMV comes from B-end business; at 3%, C-end consumers brought 24 billion RMB in GMV to 1688. In fact, purely from scale and GMV, 1688's transaction volume is less than one trillion, still a small business. So why is it being elevated to the Four Little Dragons? In Alibaba Group's China commerce system, 1688 holds a special position. In public perception, Tmall is a collection of quality big brands, Taobao is a collection of mass-market brands, and 1688 has source goods from industrial belts, focusing on simplicity and value for money. Its existence itself can become a supplementary pole to Alibaba's e-commerce system, creating a differentiated competition. Moreover, the logic of development in the incremental era is to compete on scale, while in the stock era, it's to compete on mindshare. Young users' attention and influx to 1688 represent new opportunities for it. And 1688 has shown its commitment to the young C-end market through concrete actions. In 2022, 1688 launched the 1688 Yanxuan (strict selection) business, with official endorsement, focusing on "brand dupes." This not only meets consumers' purchase expectations but also builds the mindshare of source good products. In September 2023, 1688 launched a membership-based white-label supermarket, PLUS Member Store, selecting "true low prices from the source" from brand original factories and quality factories, offering products with "same quality, better price," further attracting purchases and cultivating consumer stickiness and habits. This user strategy has been reflected in growth data and membership numbers. According to Alibaba's earnings report, as of March 31, 2023, 1688 had over 960,000 paying members. Although there's still a gap compared to Taobao's 25 million 88VIP members (as of June 30, 2022), it's already a significant improvement. In the past year, 1688's young customer base increased by 50%, and PLUS members increased by 200%. In mid-to-late March 2024, 1688 opened three stores on Taobao with source factory goods: 1688 Yanxuan Taobao Store, 1688 Enterprise Self-Purchase Tmall Store, and 1688 Industrial Expert Selection Tmall Store. According to Yilan Business reports, the 1688 Yanxuan store mainly targets Gen Z (post-95 and post-00), new middle class, and refined moms, focusing on home-centered lifestyle categories, mainly home goods. Products are positioned in the mid-to-high price range, complementing Taofactory's mid-to-low price strategy.

**1688's Future Competitor: Not Pinduoduo** Looking back at 1688's development, it initially stayed behind the scenes, mainly doing B2B wholesale. Under the wave of dupes, due to popular sentiment, 1688 unexpectedly entered young people's视野. Now, as e-commerce platforms are all competing on low prices, 1688 is proactively embracing C-end traffic and doing consumer business. Facing a market of consumption stratification, does 1688 have a chance? If we take Pinduoduo as a reference, we can see significant differences between the two. In terms of audience and needs, Pinduoduo's main consumer base comes from lower-tier markets, with core users pursuing "absolute low prices." 1688's C-end consumers are more from young people and middle class in first- and second-tier cities, with the core demand being "big-brand dupes" at a good value. The difference in target audience and demands leads to different strategies for market segmentation. In terms of merchant system and platform operations, Pinduoduo's merchant system is clearly categorized: brand merchants drive traffic; head and waist white-label merchants constitute the main revenue source; and tail white-label merchants focus on potential and growth. These three types of merchants all face C-end, and under Pinduoduo's low-price spiral and horse-race mechanism, they offer users the lowest prices. In contrast, 1688's merchant system consists of factories from various industrial belts across the country. These factories originally did B-end business, and supplying B-end remains the focus, but in the future, they will allocate some effort to serving C-end individual customers. In 2024, 1688 will also allocate 75% of its traffic to factories that can serve C-end customers well. On the surface, 1688's C-end business seems to be competing with other platforms for existing market share and low-price mindshare. In reality, according to 1688's official statement, 1688 does not intend to make source factories compete on low prices, but rather to build a solid supply base, using the good products factories are good at to meet the value-for-money needs of specific groups. As marketing guru Jack Trout said, "A brand has only two ways to exist: either differentiate or fall into a price war until death. There is no other choice." PS: Click **Read Original** to see more highlights from the 9th China FMCG Innovation Conference and the 2nd China FMCG Hard Discount Conference & the 2nd China FMCG Distributor Conference...


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671