(Yicai) Oct. 17 -- Pinduoduo achieved a gross merchandise volume for medicines of between CNY50 billion (USD7 billion) and CNY60 billion (USD8.4 billion) last year thanks to its low-price strategy, even though the Chinese e-commerce platform's drug sales team is only made up of around 10 people.

At this rate, Pinduoduo is likely to outperform the online drug retail arms of e-commerce giants JD.com and Alibaba Group Holdings, namely JD Health and Alibaba Health, within three years, industry insiders said.

Pinduoduo did not aim for high profit when it founded its online drug business in 2018. Rather, it adopted a low-price strategy, charging merchants much lower commissions than its rivals and also encouraged them to pursue drug categories and marketing methods that were popular with Pinduoduo users.

This laid a firm foundation for Pinduoduo’s online drug sales and more than 80 percent of the country’s pharmacy chains have a presence on the platform, a source close to the Shanghai-based company said.

Pinduoduo’s next goal is to convert more ordinary customers into buyers of pharmaceutical products.

Pinduoduo has never disclosed its long-term plans for its pharmaceutical team and there has never been a suggestion that it will spin off its medical business like JD.com and Alibaba Group Holdings did, said Ding Yuan, a senior practitioner in pharmaceutical distribution.

Pinduoduo has little interaction with the industry and its management have never publicly mentioned the medical business, Ding said. In his view, the only task of the Pinduoduo pharmaceutical team is to maintain the development of its medicine sales.

Other online drug retailers, such as JD Health and Alibaba Health, have proved to be profitable and have explored many fields such as business-to-business, online medical care and medical insurance.

Editor: Kim Taylor