(Yicai Global) June 1 -- Chinese e-commerce platform Pinduoduo, originally known for its affordable agricultural products bought in big groups in small cities, is nibbling away at the market shares of rivaling platforms of Alibaba Group Holding and JD.Com by expanding product categories to iPhones and cosmetics but brands worry about the effects on their sales channels and prices.

Merchants are embracing the bulk-buy platform's popularity and new opportunities but they want to prevent the negative impact that Pinduoduo's low-price strategy could have on their own sales channels and networks, and this will take a long time to balance, Wen Jianping, chairman of All View Cloud Data Technology, said to Yicai Global.

Pinduoduo is gaining more traction as several renowned Chinese brands, including home appliance maker Galanz and Whirlpool China, have opened stores on the platform. In the first quarter, Pinduoduo boosted its revenue by 58 percent from a year ago while Alibaba and JD.Com only recorded single-digit growth.

Pinduoduo is also becoming posher as the platform that used to be known for cheap groceries, particularly attractive to consumers in lower-tier cities, is becoming increasingly popular even in first-tier cities.

In 2019, Pinduoduo launched its hugely successful "10 Billion Yuan" initiative which prompted competitors to follow suit and develop channels for subsidized goods. Pinduoduo also started targeting high-end products such as iPhones with such incentives, resulting in prices much lower than the American tech giant's official retail prices, which reportedly has caused Apple to blame the Chinese platform for disturbing its sales and pricing systems.

However, the efforts have been fruitful. Zong Hui, the executive in charge of the initiative, said in 2020 that "Pinduoduo already became one of the biggest distribution platforms in the market of computers, communication devices, and consumer electronics." The current prices show that many popular handsets on the market are cheaper on Pinduoduo than on Alibaba's Tmall or JD.Com.

The newcomer is taking its users' side. The platform allows users to apply for refunds of goods without actually returning the products to the sellers, which has angered merchants.

Moreover, Pinduoduo has a powerful tech ally. Links to products can be shared on WeChat, a social media platform of Tencent Holdings. This is an exclusive benefit that no other e-commerce platform enjoys right now, Wen added.

Editor: Emmi Laine