Pinduoduo – Social commerce solution

 

One of the latest e-commerce platforms that made a breakthrough in China’s ultra-competitive and consolidated e-commerce industry is called Pinduoduo, (which literally means combine more more) and they are breaking a lot of records.

With 250 million monthly active users reached by 2018, Pinduoduo has managed to become successful within just three years after its creation back in 2015 and the company officially went public on NASDAQ listing at the end of 2018.

The business model, based on “team purchasing”, allows users to buy products ranging from daily groceries and fresh food to home appliances. By passing their orders to a designated community leader, consumers can buy directly from the suppliers without using traditional intermediaries and therefore get advantageous prices by shopping within the same area.

Users can invite their friends to form a shopping team on their social media accounts such as WeChat and QQ, which increases the demand for a product and allow Pinduoduo to acquire users for a very low cost. The model used is B2B2C, as the platform would ship orders directly to the community leader, which will then hand them over to the final user.

This way of doing social commerce is called “Community Group Buy” and it have been facing a high growth in China for a while. With ambitions to play aside Chinese e-commerce giants Taobao or JD, Pinduoduo differs in a way that their targets are mainly new arrived internet users in China located in middle-tier cities. Women account for 70% of the total users and a big proportion of them are very young. By relying on the power of WeChat and its ecosystem of mini-program, Pinduoduo have managed to stay competitive on a viral point of view. The company have used WeChat and other social media in China in an efficient way which contributed greatly to their business running and growth.

 

Pinduoduo was NASDAQ listed in New York, 2018

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