British marque carmaker Rolls-Royce is the latest luxury brand to have its name linked to China’s online discount marketplace Pinduoduo after a merchant offered subsidised Rolls-Royce Phantoms in a promotion similar to an earlier one involving Tesla cars.
The e-commerce site drew the public’s attention this week when a merchant offered to sell the Roll-Royce Phantoms worth 10.68 million yuan (US$1.6 million) at a discounted price of 9.46 million yuan including consumption tax, saving 1.22 million yuan (US$186,680).
The promotion requires interested buyers to pay a deposit of 99,999 yuan to initiate a group purchase with others. If enough people proceed with the purchase, the deposit will go towards the final payment, but if the sale does not go ahead, it will be refunded.
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As of Thursday night, more than 100,000 users had expressed interest in the deal, according to the merchant’s page on Pinduoduo.
The promotion also generated heated discussion on social media, with some netizens wondering if it was another marketing campaign by Pinduoduo to attract more premium consumers. The platform conducted a similar promotion in July, when it partnered with a merchant to offer Tesla Model 3 cars that were 40,000 yuan cheaper than the official price.
Tesla immediately distanced itself from Pinduoduo and the merchant involved, saying that Tesla’s official site was the only authorised purchase channel for its new cars. In October last year, French luxury cosmetic brand La Mer excluded Pinduoduo from a list of authorised sales channels after the platform offered discounts on La Mer facial creams.
According to Chinese media reports, Rolls-Royce responded on Thursday, saying it took note of the promotion, adding that it was initiated by the Pinduoduo merchant and had nothing to do with the Rolls-Royce brand.
Rolls-Royce said it was “willing to see e-commerce platforms and merchants trying different product sales and promotions provided they did not harm consumer interests and the Rolls-Royce image”, according to Chinese media.
Rolls-Royce did not immediately reply to inquiries from the Post about the matter.
However, on Friday the promotion was no longer on the Pinduoduo platform. Tuohai Automobile, the merchant responsible for the promotion, told the Post it had only offered a small number of the Phantoms but declined to say why the product was removed.
“We are an open platform and welcome all brands and distributors to work with us. Our aim remains to deliver the best value for money to our consumers and we put their interests first,” a Pinduoduo spokesman said in a written reply on Friday, without specifically addressing whether the platform was involved in offering the subsidies.
Shanghai-based Pinduoduo is known for its deep subsidies and group purchasing model, which is popular among price-sensitive consumers, especially from China’s second- to lower-tier markets. Since its debut on the Nasdaq three years ago, Pinduoduo has garnered over 731 million active buyers and has become one of China’s largest e-commerce firms, along with internet giant Alibaba Group Holding’s Taobao and e-commerce giant JD.com.
Alibaba is the parent company of the South China Morning Post.
“If it is a collaborated marketing campaign between Pinduoduo and the merchant, then it is already successful,” said Ding Daoshi, director of research at internet consultancy Sootoo in Beijing. “The promotion itself has attracted huge attention … and Rolls-Royce’s statement to some extent also approved such behavior.”
Ding predicts there will be more such promotions by Pinduoduo to help it shed its original image of being a site for low-end or counterfeit products. “[Pinduoduo] will eventually break away from these labels and become a comprehensive, large-scale e-commerce service platform,” said Ding.
Pinduoduo has invested in China’s rural market by helping digitalise the sales of agricultural products online. The company also launched a 10 billion yuan subsidy programme last year, designed to attract more users, especially in the premium segment.
Shortly after Apple introduced its iPhone 12 in October, Pinduoduo included the latest models in the subsidy programme and they are now available on the platform with discounts ranging from 300 to 800 yuan.
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