Pinduoduo works on a social e-commerce model.By launching a group purchase with friends and family (often shared in social media like QQ and WeChat Moments)., the user buys the product at a lower price. To get more consumers on board, the e-commerce giant launched in March a new service called Taobao Tejia, or Taobao Special Price Edition, which lets users make bulk purchases of cheap products in a way similar to Pinduoduo.“The Pinduoduo model is based on social media and has wider reach into a lot of new Internet citizens,” said Jason Ding, partner at consultancy Bain & Co. “Alibaba is trying to serve more high-end customers, but there are people who don't want to pay for premium, but value. Launched in 2015 by ex-Google engineer Huang Zheng, the company operates a bulk-buying business model similar to U.S.-based Groupon. The app works slightly differently from other platforms, allowing users to participate in group purchase offers. Although this trajectory is very unique, a lot of brands and platforms can take cues from Pinduoduo’s success. More than just a digital shopping platform, it is actually a social e-commerce app, which uses a “team purchase” model and uses social sharing on Chinese social networks, in particular WeChat. Launched in 2015 by ex-Google engineer Huang Zheng, the company … I am a graduate of the Medill School of Journalism, Northwestern University. We explain how Pinduoduo works … Watch this video for a detailed product walk-through:Pinduoduo is China's most valuable private e-commerce company that just filed for a US IPO, less than 3 years after it was founded. It hasn’t figured out its best monetization strategy, according to Wang Xiaoyan, an analyst at Shanghai-based 86 Research. Editor’s Note: Pinduoduo reported its numbers in RMB. For example, if people find what they want on the site and invite enough WeChat friends to form a purchase group, they can enjoy discounts of up to 90%. The company instead relies on an algorithm to parse user data and show tailored product listings. Pinduoduo pinned its attraction on meshing online shopping with social media. I contribute to Forbes, and previously I freelanced for SCMP and Nikkei. In this deck, we explain how Pinduoduo works and what led to its rapid growth.Pinduoduo is China's most valuable private e-commerce company that just filed for a US IPO, less than 3 years after it was founded. Follow. According to Wang, an average user spends $50 on Pinduoduo per year -- this compares with $1,300 on Alibaba and $500 on JD.comWhat’s more, Alibaba is fighting back. Its backers include Chinese investment firm Banyan Capital and Tencent, as the Shenzhen-based tech powerhouse itself seeks to expand its reach into Chinese towns and villages.Alibaba has long dominated the China’s $370-billion online shopping market, but its digital malls have never been popular with 59-year-old Liu Liping.With a monthly income of $470, Liu, a retired worker living in the northern city of Huhehaote, finds the selections on Alibaba’s sites a bit expensive. Prior to Beijing, I spent six months as an intern at TIME magazine's Hong Kong office.
As Pinduoduo works in an intense competitive environment with less tolerance of consumers, higher costs may be incurred when it copes with those issues. Though Pinduduo continues to make losses, it has the potential to turn profitable if it gets enough scale in China’s e-commerce market. So when she finally shopped online for the first time in 2015, Liu turned to an alternative platform called Pinduoduo, which offered cheap household products such as $1 toilet paper packs and $5 bed sheets.This works perfectly well for residents in lower-tier cities.
Investors are swooping in.
To further encourage sharing on social media, Pinduoduo even offers cash back incentives and free products to its most loyal customers.“Managing product quality is a very important challenge for them,” said Bain & Co’s Ding. We explain how Pinduoduo works and what led to its rapid growth. How Pinduoduo works? Pinduoduo has experienced a meteoric rise to the top of the Chinese e-commerce landscape over the last 2 years. I contribute to Forbes, and previously I freelanced for SCMP and Nikkei. "I am a Beijing-based writer covering China's technology sector. Unlike the maturing Internet population in Chinese metropolises, they are only recently online and depend on the ubiquitous WeChat as the chief source of information, including following their friends’ online shopping suggestions to place orders. For Pinduoduo, the laser-focus on work is testament to Mr Huang’s mantra of “work is work and life is life”. Liu said she discovered Pinduoduo through her WeChat friend circle, when someone suggested she could even purchase fresh produce cheaply.Pinduoduo, however, isn’t without challenges of its own. This includes everything from $1 T-shirts to $80 smartphones. Pinduoduo has seen explosive growth since its launch in 2015, becoming one of the largest ecommerce apps in China. Pinduoduo’s current annual active customers as of Q2 2019 reached 483 million, surpassing that of JD.com. Since the counterfeit credibility crisis, Pinduoduo has begun to focus on evaluating the products and services offered by shopkeepers, leading to conflicts between the two sides.
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