Digital economy a shining beacon in city's private economic landscape

As one of the leading Internet players in Shanghai, Pinduoduo has embraced the current trends in domestic online consumption and the digital landscape while expanding overseas.

Known as an "e-commerce startup for the multitudes," it has expanded beyond its initial customer base and region.

Many private enterprises look to Pinduoduo for inspiration, and the city's long-term support underscores the sector's importance, with existing and new businesses boosting momentum over the decades.

Fortune and consulting firm BCG named Pinduoduo in their "Future 50" list this year because of its exceptional growth potential based on financial indicators, strategic direction, technology, and investments.

Pinduoduo, a leading Shanghai private company, was launched in 2015 by local entrepreneur and former Google employee Colin Huang.

In 2023, the total amount of economic value added from the private sector in Shanghai went up 2.5 percent from a year ago to 1.26 trillion yuan (US$175 billion).

About 26.6 percent of the city's total GDP comes from private economies, and last year, their contribution to retail volume increased by 3.9 percent to 525.9 billion yuan.

The digital economy stands out as one of the bright spots in the city's private economic sector, with new formats of shopping, lifestyle services, and entertainment emerging in the past decades.

The latest Fortune 500 ranking released in early August further consolidated Shanghai's position as a major economic hub where private businesses continue to thrive.

Shanghai now has 13 Fortune 500 companies with headquarters in the city, adding one firm compared to the previous year, making it the fourth biggest city behind Beijing, Tokyo, and New York in terms of the number of companies listed on the top 500 rankings.

The Internet technology and service sector has also been the city's stronghold. A total of 38 Internet technology firms have been included in the city's top 100 emerging enterprises, according to the latest ranking of the Shanghai Enterprise Confederation, Shanghai Federation of Economic Organization, and Jiefang Daily.

A standout addition to this year's Fortune Global 500 list is Pinduoduo, which made its debut at the 442nd position with an annual revenue of US$34.98 billion.

Pinduoduo, which means "join together for more" in Chinese, attracted buyers with its catchy name and easy-to-use interface, with Tencent and Sequoia China being its early investors.

After its September 2015 launch, its active user base climbed to 100 million in the first year and 200 million in the second.

After focusing on agriculture and supplying fresh commodities to urban buyers, it moved to daily groceries, electronics, and smart gadgets.

It took market share from Alibaba and JD.com by targeting price-sensitive Internet users in small cities and townships.

Pinduoduo's 2018 Nasdaq IPO valued the company at US32.4 billion, five times more than six years earlier.

Due to its recent global initiatives, NASDAQ-listed shares temporarily topped Alibaba and JD in late 2023.

Temu, which allows Chinese merchants to sell directly in dozens of countries, was the most downloaded US app last year.

Launched in September 2022, the budget platform quickly rose to the top of US app stores and expanded to Europe and Southeast Asia.

Second-quarter net income doubled to 32.01 billion yuan from 13.11 billion a year earlier, and revenue rose 85.7 percent to 97.06 billion yuan.

The private sector is projected to receive a further boost in both domestic and international markets, with China expected to create legislation to "effectively implement equal treatment of state-owned and private enterprises."

Zhang Jun, dean of Fudan University's School of Economics, believes that private firms may play a significant role in a seamless and optimal overall policy environment.

He remarked that China's economy is poised to attract entrepreneurial and innovative vitality from the grassroots private sectors, potentially revitalizing the entire society's economic spirit.