Yimaiche, a Chinese car dealership group, on Monday launched a tempting group buy event on e-commerce platform Pinduoduo (NASDAQ: PDD), offering a China-made Tesla Model 3 for RMB 251,800 (USD 35, 946), which is RMB 40,000 (USD 5,710) lower than the original price.
Tesla yesterday felt prompted to deny being involved, exposing the sometimes difficult relationship between brands and Pinduoduo.
Yimaiche’s flash sale of the discounted Tesla Model 3 will begin on July 26 and only five lucky participants can get a car. Although Pinduduo is known for its steep discounts, this large subsidy still raised a few eyebrows.
On Tuesday afternoon, the California-based EV maker announced via microblogging site Weibo that it isn’t involved in this promotion and that it didn’t provide any vehicles to Yimaiche or Pinduoduo for the event.
Netizens commenting on the post were poking fun at the platform, saying that “Elon Musk was now also purchasing his supplies on Pinduoduo.”
36Kr cited sources close to Pinduduo, indicating that the e-commerce site has verified the vehicles and subsidies with the merchants. It’s unclear which party is sponsoring this group buying event.
The sale is not the first time that brands had to clarify their involvement with Pinduoduo promotions. In October, high-end cosmetics label La Mer listed all authorized dealers and platforms on Weibo—without mentioning Pinduoduo—after the platform offered discounted facial creams as part of a “10 billion RMB subsidy campaign.”
The e-commerce upstart is winning price-conscious customers in smaller cities and townships with its bargains, and the story gained the US-listed company a valuation of USD 100 billion at its peak in June. It has meanwhile tried to enlarge its user base by attracting less price-conscious customers. Pinduoduo’s subsidy campaigns now cover goods including Dyson dryers, Dior perfumes, iPhones, and Moutai liquor.
The aggressive discounts, however, irk some big brands who hesitate to cooperate officially, reluctant to give up control over brand image and pricing strategy. Therefore, high-end goods are usually sold on Pinduoduo via dealers.
For the first quarter of 2020, the firm’s total revenues reached RMB 6,541.1 million (USD 923.8 million), a 44% increase from the previous year. Gross Merchandise Value amounted to RMB 1,157 billion (USD 163 billion) in the twelve-month period prior to March 31, up 108% year-on-year.