Pinduoduo is planning to raise $5.6 billion to dramatically expand its one-day delivery operations, which offer customers items directly from farmers.
China’s second largest ecommerce retailer, which now boasts 731 million annual customers, said earlier this week that it planned to sell 25.3 million American depository receipts, expected to be worth around $3.6 billion.
Pinduoduo also said it planned to raise $2 billion from selling convertible bonds, bringing its total fundraising as a public company to $10.6 billion.
It plans to use the funds to remove “fundamental roadblocks” to one-day delivery on farm goods across China, which it has spend the last few years building demand for.
“The presumption that most consumers still prefer to go to the wet market or supermarket for their daily essentials has been challenged over the past few months,” Pinduoduo’s chief executive Chen Lei said.
Pinduoduo’s vice president of strategy David Liu added that the retailer already had “some experience” operating its own fulfilment network, but “what we need to build now is of a totally different scale”.
It comes as the company says it is on track to double last year’s online grocery sales thanks to a massive boost from the pandemic.
According to Lui, it “sold 136.4 billion yuan ($19.3 billion) of fresh produce on its platform” last year and is close to “doubling that this year.”