What is Pinduoduo and how to get started

As of 2019, Pinduoduo has amassed a 7.3% market share, coming behind JD.com (16.7%) and Alibaba (55.9%) according to eMarketer. Tapping into the fastest-developing areas in China, Pinduoduo is a popular outlet for international brands to achieve high volume sales fast. An emphasis on cheap products often brings issues ifc markets review of quality control with it; Pinduoduo has long been known for having a problem with shoddy and counterfeit goods listing on its marketplace. In 2019, it was placed on a blacklist by the US trade representative’s office as a high-profile marketplace that plays host to intellectual property rights violations.

  1. “A portion of the Company’s buyer traffic comes from its user recommendation or product introduction feature which buyers can share with friends or contacts through social networks such as WeChat and QQ.”
  2. Duo Duo Orchard was the first popular game on the platform, users can grow virtual fruit trees, collecting water droplets to water their tree by shopping, browsing, and interacting with other users on the platform.
  3. Pinduoduo entered the Chinese ecommerce scene in 2015, and rapidly grew to become one of its largest players thanks to a savvy combination of social features, gamification, low prices, and targeting the right audiences.
  4. The overall value of goods sold there has already reached around $154 million.
  5. It’ll also give your team more insight into resonating with their potential audience.

Founded in 2015, Pinduoduo is a mobile-only marketplace that connects millions of buyers directly with sellers. It has become one of China’s most popular e-commerce platforms in recent years for fresh produce, household items, clothing and electronics. The company aims to bring more businesses and consumers online so that local communities and rural agricultural prodcuers can benefit from the growth of the digital economy. The combination of featuring both e-commerce and social sharing creates a new social life for Chinese users that they can purchase online items by engaging with the social groups and team purchasing. Therefore, a social chat platform like WeChat acts as a crucial weapon for Pinduoduo to build a good “word-of-mouth” and ultimately facilitate the social sharing function. This function also helped Pinduoduo to displace Taobao from the No. 1 position of e-commerce apps in just two years.

Business Requirements

Alibaba and JD have found success in larger so-called tier 1 and tier 2 cities in China which include the likes of Beijing and Shanghai. There is an option to just buy the item directly but the price of that product is higher than that of buying it in a group. If that number is not met within 24 hours, then the group buy is cancelled and those who have already committed money will be refunded.

Moreover, this direct-to-consumer model indicates to cut out the middlemen and further deliver price savings to the customer, which in turn generates more demand and economies of scale. In return, users will receive free fruit from Pinduoduo after the virtual tree reaches its maturity virtually. The Daily Check-in mechanism is to encourage users open the apps everyday with the redeemable points reward which can be deducted in their item purchasing. Its users are drawn by deals on a wide range of good which include things like clothing, fresh productsm electronics, as well as common household necessities like tissue paper.

How Does Pinduoduo Attract Millions of Users?

But within the world’s second-largest economy, the e-commerce firm is growing faster than major rivals Alibaba and JD.com and gaining share quickly. Where does generative AI fit in with luxury brands and their reputation for authenticity and great service? Giants Alibaba and JD.com are undoubtedly reluctant to be drawn into a price war, but the success of Pinduoduo has prompted some defensive moves, particularly as the economic climate grows tougher. How did Pinduoduo succeed at becoming such a dominant force in a short space of time?

It’s not considered a registration expense because it’ll be used to refund unsatisfied clients. If your offerings don’t have these issues, the money will eventually return to your account. If you don’t reduce the price to 0 within 24 hours you don’t get the item for free and you have to start all over again.

You can also implement search engine optimization strategies to boost your promotional content on platforms like Baidu, Shenma, or Sogou. Appearing on organic search results will help your brand gain credibility and authenticity in the eyes oanda review of local consumers. The user even has the chance to receive a free product if enough friends register for the bargain. ETOC also provide free educational content to help brands understand more about China e-commerce and digital marketing.

Later in 2018, Pinduoduo has also started to incentivize users to go to the standalone Pinduoduo app, over 60% of active users have come from and rely on Pinduoduo’s WeChat mini program. Users will get one Brand Card after they purchased a branded item, and they can alternatively share with their friends to attract them browsing and ultimately purchasing the branded products. This is an effective incentive for the platform to promote its branded products. The Brand Black Card is aiming to encourage the users leave comments on the items they purchased and offer them with the discount on branded products in return.

What is Pinduoduo? Revolutionizing retail, generating profits

The company set up an RMB 150 million ($22 million) fund to deal with after-sales disputes. The more you shop on the platform the more water droplets you receive, or team purchases and sharing items alternatively enable users to obtain special tools which are accelerating the growth of the tree. However, there is massive forex broker rating potential for companies to gain traction in lower-tier cities in China in the upcoming decade which will be a key driver of revenue growth. Further, the increase in the purchasing power of China’s middle class and rising GDP numbers make e-commerce companies like Pinduoduo a good bet for long-term investors.

Pinduoduo’s parent company, PDD Holdings, has now branched out overseas with the launch of Temu, an online marketplace that – like Pinduoduo – offers a vast array of goods at rock-bottom prices. At the time of writing, Temu is present in 49 countries, most recently launching in South Africa in January 2024. For consumers in China’s rural, ‘lower tier’ (i.e. smaller) cities, WeChat is a place of information and connection, and so this combined with Pinduoduo’s low prices allowed Pinduoduo to take hold within rural communities in a major way. But it is succeeding thanks to a new ecosystem consisting of super app WeChat, mobile payment infrastructure, and mobile-first users. The discount is usually up to 90 percent, including everything from RMB 10 ($1.50) bed sheets to RMB 1,000 ($150) PCs. More than 6.4 million units of tissue paper were sold at RMB 12.9 ($1.90) for 10 boxes and 4.8 million umbrellas were purchased at RMB 10.3 ($1.51) apiece.

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