Pinduoduo IPO: Chinese e-commerce black sheep goes public in US

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A young mobile platform called Pinduoduo has become China's most downloaded online shopping app over the past several months. The three-year-old company is now the third largest e-commerce platform in China. It jumped 40 percent in its trading debut in the US just a couple of days ago. Tao Yuan has more.

Alibaba has reached the era where it's globally famed. But right behind it in China's bustling e-commerce world, a black sheep, called Pinduoduo. At just three years old, the platform has already attracted over 300 million users.

The big draw -- deep discounts on everything from groceries to gadgets, which cater to a huge underserved population: older or more price-sensitive online shoppers from China's smaller cities and rural areas.

"I buy flowers on Pinduoduo. It's so cheap, only seven yuan a week, not even enough to cover the delivery fees."

"I was very satisfied. The price was reasonable, the products were decent. I'm quite happy with it."

A certain twist to the traditional online shopping experience is what's fueling Pinduoduo's incredibly low price.

TAO YUAN SHANGHAI "Think of it as a mashup between Groupon and your Facebook page. Customers spot deals on the Pinduoduo platform, then tell their friends to buy together and get a discount. The merchant can generate more sales, while at the same time, customers can enjoy better deals."

Makes sense? And the ubiquity of China's social mobile app WeChat means Pinduoduo has a large word-of-mouth market. But red flags abound as the company goes public on the Nasdaq.

"I feel sometimes the products I receive do not match their description."

"I tried it a few times. I bought clothes on the platform and found out the quality wasn't good. There were lots of loose threads and things like that."

Sure enough though, quality isn't what Pinduoduo is after. The company says its goal is to meet basic demands, providing good-enough-to-use products to lower-income consumers.

Carving out a niche market. It might not be for everyone, but the rise of Pinduoduo is becoming a phenomenon, even by the standards of China's tech scene.