Pinduoduo – the new social e-commerce phenomenon from China

round the time when we think the e-commerce market is saturated and there is no space for novice models, out of nowhere, then something like Pinduoduo comes along in China. Alibaba & JD.com, Chinese ecommerce pioneers, caught by surprises. Pinduoduo’s married the social platforms to wildfire their exponential growth which even frighten the big playersPinduoduo didn’t invent the social e-commerce model. Groupon  pioneered the group-buying concept years ago. But it is succeeding thanks to a new ecosystem consisting of super app WeChat, mobile payment infrastructure, and mobile-first users.
Pinduoduo offers a wide range of products from daily groceries to home appliances and its twist lies in its integration of social components into the traditional online shopping process, which the company describes as the “group purchase” model.
The company’s bulk-selling model easily creates huge orders for the sellers and leaves them more room to cut prices. At the same time, Pinduoduo’s app is designed to facilitate this: “Alibaba Taobao’s interface is search-based and centered on multiple product displays, while Pinduoduo’s is more similar to a news feed and thus gives more exposure to a single product and easy to create. Taobao has more products listed, but Pinduoduo put its focus on fewer bestsellers that attract more buyers.”
By sharing Pinduoduo’s product information on social networks such as WeChat  and QQ, users can invite their contacts to form a shopping team to get a lower price for their purchase. The mechanism keeps the users motivated and better hooked for a more interactive and dynamic shopping experience. Coupled with other incentives such as cash, coupon, lottery and free products, Pinduoduo manages to acquire users at a very low cost. Combined with the extra satisfaction of scoring a good deal with your friends as a team, Pinduoduo soon became a viral sensation in China.
Here are some of the highlights:
  • Pinduoduo went above 100 billion RMB per year of merchandise sold on the platform 2 years after its launch… it took 10 years for JD.com to get there
  • Monthly Active Users (MAU’s) reached 195 million in June 2018: that’s 31% of Alibaba’s MAU’s
  • Pinduoduo users are predominantly female, living in Tier 3+ cities
  • The average order on Pinduoduo is 6 USD, against 30 USD on Taobao/Tmall and 60 USD on JD.com
Portal features
The App combines following tactics to push you to share the app with your friends and keeping them hooked:
Group Buying
Free products
Short term coupons
Ask friends to “bargain”