This can be seen as a unique form of empowerment of Pinduoduo to the supply chain, and also a more suitable way for Pinduoduo to guide small and medium-sized manufacturers to upgrade. The second is the lottery. In this way, Pinduoduo is more like a social sharing driven version of Costco or Dollar General. Many researchers and entrepreneurs reached out to us with questions about their new group-buy business model. Its stock is also underfollowed, as it has only 10K followers on Seeking Alpha compared to JD’s 84K and BABA’s 343K. Pinduoduo is known as PDD. © 2020 Forbes Media LLC. To support the farmers’ upskilling efforts, Duo Duo University, Pinduoduo’s training arm, equipped entrepreneurial farmers with e-commerce operations know-how, as well as marketing knowledge and … Today Pinduoduo’s $40+ billion market cap is the equal of JD.com and its 366 million monthly users and 536 annual active buyers are both second in China only to Alibaba. For each product on Pinduoduo platform, shoppers can choose to buy the product individually, or initiate or join a team purchase. Business Model Pinduoduo is a mobile-first e-commerce marketplace that is known for its value-for-money merchandise and viral marketing. ... Pinduoduo Inc . Here we take the iOS side as an example for analysis. Well-designed social+ companies address … The business model ‘TEAM PURCHASE’ ... Duo Duo Farm operates on a tripartite partnership model involving Pinduoduo, local provincial governments, and agronomic research institutes (refer to Figure 3). This will inevitably become a difficult problem that can’t be circumvented on the development path of Pinduoduo-the pit that Taobao once stepped on. There are many factors, but one of the most interesting is how Pinduoduo has successfully gamified shopping for the most mundane everyday products to drive re-engagement and user retention. At this point, the practice of Pinduoduo is very different. There are few homepage modules, and there are no various special channels and scene channels that other e-commerce platforms have learned under the first focus, functional entrance, and big promotion floors, but directly access the product recommendation list, so that the recommended products are on the first screen. In summary, the company has been growing much faster than China no. Pinduoduo has doubters Due to its discount model, the company mainly sells cheap products to lower-income shoppers, especially in China's third- and fourth-tier cities. It’s no coincidence that founder Huang “Colin” Zheng, an ex-Google engineer, had prior startup experience on a consumer electronics e-commerce site as well as a WeChat based role playing game company. However the company has proven to be able to churn out unprecedented growth quarter over quarter: 2019 full year GMV (Gross Merchandise Value): RMB 1.997 Trillion, 113% growth YoY. The basic business process is as follows: The total amount of red envelopes is huge, and users need to share multiple times to meet the conditions. Pinduoduo gathers consumer demand and provides small and medium manufacturers with sufficient demand information. China. A 50 yuan red envelope can form a huge sharing chain, and the most powerful thing is that the amount is only effective if the conditions are met-so, continuous feedback and reluctance to sink the cost will make users find ways to start after the task To complete (of course, the chain of control tasks should not exceed the user’s patience limit); and if the user fails to complete the task, all the previous sharing is just to do the wedding clothes for the platform-the platform gains massive new users through the user’s sharing. China’s e-commerce market is huge and still growing, but the real question remains whether the business model can be expanded abroad to other countries and … These phenomena are what I call “social+” companies: companies that take a single category—from gaming to music to ecommerce—and build an integrated social experience around it. The quarterly growth of active users is 2X of those of JingDong and Alibaba. Pinduoduo started by targeting price-conscious (as opposed to brand-conscious) buyers in third and fourth tier Chinese cities – an underserved market. 2019 full year Revenue: RMB 30.14 billions (130% growth YoY). The merchant has found it, and the next thing to solve is how to find the user. The B2C model Tmall and JD.com have limited support for small merchants at the long tail, and the survival space and benefits of the merchants in Taobao’s tail are increasingly encroached upon. Let’s see how Pinduoduo guides users in this process. These small and medium-sized businesses that have been squeezed out and eliminated during the continuous upgrade are precisely the resources of Pinduoduo’s early merchants. The problems of counterfeit goods, counterfeit goods and inferior goods have become the deepest pains of Pinduoduo. Many aspects of Pinduoduo, from the underserved target markets to the unparalleled distribution afforded by WeChat, are singular and cannot be reproduced. There is no brand premium for the goods. Pinduoduo, on the other hand, gives the user an item feed they can browse that intelligent agents/AI help tailors and makes more targeted over time. It enables these buyers, often women in charge of household purchases, to obtain deep discounts by getting their friends to participate in group buys of items ranging from produce to diapers. Pinduoduo operates a mobile e-commerce platform in China, with a wide range of products. Pinduoduo can achieve a certain degree of mass customization to the upstream supply chain through the aggregation of consumer demand. Pinduoduo was found in September 2015 in Shanghai by former Google engineer Zheng Huang and is a third-party social commerce platform that focusses on connecting manufacturers, suppliers and retailers with end-consumers in the B2C market. Pinduoduo has an app and a WeChat Mini Program. Less intermediate circulation links mean lower intermediate costs and non-branded goods. Based on this, manufacturers can make reasonable planning of production resources for a certain period of time. The same goes for the ultimate models of Netease Yanxuan, Xiaomi Youpin and Beijing-made. The continuous amount forms a continuous sharing power. But Pinduoduo and other newcomers such as the Little Red Book and Shihuituan are challenging the traditional business-to-consumer model. Pinduoduo's latest net profit (on an adjusted basis) signals that the business is approaching critical mass. In a September, EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation With Forbes Insights. This unique business model allows Pinduoduo to carve out its niche at the beginning, but its success depends on the excellent quality of the product itself. This forces the game to continuously update, iterate and create, creating novelty and changeable rewards for users. PDD’s stock has … Pinduoduo was founded initially back in 2015 as Pinhaohuo (PHH). Recently, it has appeared with much greater frequency in my news feed in this initialized form: PDD. Combined with the core gamification, the basic shopping process of a Pinduoduo user should be: Homepage-flip Category tab page (or click the recommended icon at the bottom)-look at the product recommendation list-view product details-initiate a single order-payment is successful. I hope these efforts will lead to more inspirations and business ideas for the future of Pinduoduo. Currently, I am the CEO & Co-founder of Appnext, a leading on-device and in-app discovery platform. This enables item discovery and a space where purchase decisions are dynamic and can be influenced by other people. With the further development of Pinduoduo, the user group is no longer limited to “Beijing Fifth Ring Road”, and the proportion of users in first- and second-tier cities has gradually increased. For shoppers who love a bargain, it’s an irresistible experience. Let’s take a deep breath and dive into our 3–week research of the Pinduoduo success. But even more impressive is its 7-day retention rate of 77%, the highest of any e-commerce platform in China. 1 . Pinduoduo also added some branch tasks in addition to the shared main task. through C2B, promote the upgrade of the low-end supply chain. As long as the attractiveness of the low price is strong enough, the shortcomings of poor accuracy of product recommendations become very small-the user’s threshold is low enough, then the user’s interest preferences that need to be met to cross this threshold are simple enough. If Huang could find a way to make buying the most mundane everyday household items exciting and fun, then app developers everywhere can try to find ways to do the same with their apps. Of course, the introduction of high-end suppliers and brand companies should also be promoted, but Alibaba and JD.com’s Dashan are in front, and their conflict with the main station’s team play may be a difficult problem to solve gamification with weak sharing that emphasizes interactive interaction within the station. Compared with the difficulty of removing the 50 yuan red envelope, the lottery must get a more convenient discount. At first, I genuinely thought it was a new name for Sean “P Diddy” Combs and left it at that. First, these gamification are still mainly one-sided profit and can not achieve mutual benefit. When Pinduoduo’s CEO Colin Huang’s net worth of USD 45 billion surpassed Alibaba founder Jack Ma’s last month, the world still knew quite little about this new e-commerce heavyweight in China. Secondly, this is a new platform and new competitive opportunities. The third is to open the red envelope by completing the single order, and to guide the user to place the order is the ultimate goal of the platform. This social sharing of deals is primarily done on WeChat, the super app that is used by a billion people in China. But the lessons of building a socially shared, dynamic experience where the use of app itself drives consistent re-engagement are more important than ever. Pinduoduo puts new spin on group buying You get free products for getting friends to install the app, and there are leaderboards showing people who have had the most friends sign up. New users will get more money and old users will get less money, and guide users to take the initiative to pull new ones. Merchants gradually gathered heard about Pinduoduo; new small and medium-sized businesses. I Was Networking, but He Thought It Was a Date, You Don’t Have to Be First But You Must Be Formative to Win, Inside the Takedown That Put Carlos Ghosn in Jail, Richard Branson — How The Virgin Brand Came To Life, The Damnation of Differentiation: How to Be Seen in an Ocean of Competitors Just Like You, Food Safety and Traceability With Technology, how to make merchants willing to sell at very low prices, how to find the target user group on the buyer’s side. The advantage of the stranger’s billing is that the order is quickly formed, but the more encouraging way of the product is to initiate the payment of the bill and then share it with friends in the circle of friends. Of course, it is even more worth mentioning that what makes Pinduoduo stand out (and also makes it highly criticized) should be its various social fission gamification outside the main process of Pinjang. PHH’s initial business model consisted of buying fruit in bulk from farmers and then selling it directly to consumers. As a result, the small manufacturers who originally pushed back the low-end supply chain have achieved the ultimate in single products. With the gradual saturation of the e-commerce market, how to better meet the user’s purposeless loitering needs, increase the user’s use time, and increase the user’s order rate have become the top priority. The purpose of the latter is to attract more traffic through social elements. The purchase bar below shows the two buttons of separate purchase and initiation of a single order. The business Pinduoduo is a third-party social commerce platform, mainly providing group buying offers at reduced prices. In many ways, Pinduoduo represents the most successful example of how a mobile commerce app can be designed from the ground up to engineer social sharing, viral engagement and repeat buying as part of the user experience. Opinions expressed by Forbes Contributors are their own. Bottom line: A new IPO by e-commerce company Pingduoduo could do reasonably well due to its rapid growth and unusual business model, but could suffer from a “flavor of the day” element over the longer term. The replacement and mutual promotion of the means (red envelope subsidy) and the purpose (guided order placement) are also subtle. Since many of the older women are charged with caring for a whole household, Pinduoduo’s bargain-priced group purchasing model has garnered broad appeal among the demographic. To break through the supply chain, many efforts should be made to develop the C2B model. In the e-commerce business model, a platform generates revenue through a commission on every transaction. e-commerce platform that offers a wide range of products from daily groceries to home appliances Within three years of its founding, Pinduoduo has attracted over 300 million active buyers and over 1 million merchants through a new shopping format and experience. Pinduoduo business model replies on social e-commerce and is designed to unite more people, buy better things at lower prices, and experience more benefits and fun. The attractiveness of users with constant rewards will decrease rapidly as the user’s frequency of use increases. It is also important. The first amount of the user’s demolition is large (about 40% of the total amount), and the user’s excitement is used to quickly guide the sharing and dismantle the second amount to the user. Pinduoduo once described its business model as "Costco meets Disneyland." Does Pinduoduo have to step on it again at the same pace, or a new way? Category tab page: The category tab page is the product recommendation list under the second category, without the filtering function, all users can do is keep scrolling down the page. The low prices and thrill of getting a good deal have made it popular with value-conscious consumers, initially in the smaller cities and rural areas, but gradually in the top-tier cities as well. This is profound: the desktop e-commerce model (Amazon/JD.com) is based on a multitude of SKUs, the buyer knowing what they want, and the search function. Introduction – Pinduoduo and its business model. I also hope the Partnership will use … Where Groupon focused on local vendors of “want to have” goods and services like fancy dinners and massages, Pinduoduo offers deep discounts for bulk purchases of everyday “need to have” household items. 1 e-commerce Alibaba and no.2 JD.com, directly challenging the incumbents that had taken 20+ years to build. You may opt-out by. This retention comes from the continuous re-engagement at the prospect of winning deep discounts. If other e-commerce is using user interest preferences to guide users to place orders, Pinduoduo is using low-cost explosions to guide users to place orders. Going by the common classification of China’s municipalities into “tiers” of socioeconomic activity, about 60% of Pinduoduo’s users come from cities in the third-tier and lower, creating huge opportunities for the … Digital economy observers outside of China can be forgiven for missing the meteoric rise of Pinduoduo. The first is the group with low spending power, and the typical ones are the third- and fourth-tier user groups. The so-called C2B is to mass-customize the supplier side after gathering consumer demand on the consumer side. I have more than 17 years of experience founding companies in the digital space, focusing on the future of consumer internet, mobile and marketing. I cover the evolution of the mobile marketplace and the app economy. Pinduoduo is becoming a major force in China's e-commerce industry. Hence, when evaluating e-commerce stocks, one should consider three key metrics. If a friend has a red envelope activity, at the same time, they can also get the amount of their own, mutual benefit, and guide users to share with each other to form multi-directional communication; if there is no red envelope activity, the friend will send a red envelope to the friend, forming a new spread. Part of what makes Pinduoduo unique is its differentiated business model. Pinduoduo was initially founded in early 2015 as yqphh.com, or Pinhaohuo (PHH, “piece together good goods”). Pinduoduo is the fastest growing e-commerce startup in the history of China. The growth story behind Pinduoduo is nothing short of impressive. Recognized as a consumer-to-manufacturer (C2M) model, consumers create value for manufacturers and provide merchants ideas for new product developments. The name Pinduoduo means “Together, More Savings, More Fun.” It’s a great summation of the company’s core group-buying value proposition, which has been described as “Groupon on Steroids.” But there are key differences. Why it matters: Pinduoduo is looking to fundraise amid buoyed investor confidence on the company’s first-ever quarterly profit, reported in the quarter ended September.The fast-growing e-commerce platform plans to fund new business channels and cover … Specifically every one wanted to know about exactly how they are able to catch up with the big e-commerce boys in only 4 years since launch. The reason is that most people’s pursuit of high-quality goods will not cover all aspects. Huang Zheng’s understanding of Pinduoduo users is “price-sensitive users.” May wish to consider from two perspectives. At present, there are various social games on the platform as follows: There is a certain difference between the activities of getting cash every day on the Android side and the iOS side (price discrimination). Chinese e-commerce platform Pinduoduo is planning to raise up to $6.1 billion through a convertible notes offering and equity. Let’s Break Down Pinduoduo’s Business Model. And what can Pinduoduo bring to these businesses? Currently, I am. It has so many deals that I want to spend all my time and money on it.”. Many original waist and tail merchants have the opportunity to become head merchants on this platform, and the platform’s low-price strategy is bound to tilt its traffic resources to low-priced goods, so merchants Active profit making is the most effective means of competition in the new environment (compared to the complex operations of other platforms). First we downloaded the App and experienced it first hand. Background ; Pinduoduo was founded in September 2015 by Colin Huang, an ex ... business model may not be sustainable in the long run. The main purpose of the above two links is to use streamlined design to create a sense of scene when users visit low-cost hypermarkets, to attract users to continue to slide down on the product recommendation page, and finally to attract users to click to enter the detailed page. The large fluctuations in production also lead to high production costs (for example: the production line is suddenly more and less, suddenly stopped, and the manufacturer’s effective utilization of production resources is extremely low). The shopping scenarios and shopping guides adopted by traditional e-commerce can be roughly summarized into the following categories: The difficulty of satisfying the demand with clear objectives, the demand with ambiguous objectives, and the goal with no purposeful loitering increases in turn. In some scenarios, low-priced goods have great appeal. Founded in September 2015, Pinduoduo is the fastest growing e-commerce startup in the history of China, attaining a GMV of $15 billion only two years from launch, a milestone that took incumbents Alibaba and JD.com 5 and 10 years to achieve. But not everyone is impressed with the company’s business model. For counterfeit goods, the platform can be rectified by strict review and severe punishment; for counterfeit goods, it can be rectified and guided both ways; but for inferior goods, it is subject to the small and medium-sized merchants’ own production capacity, not the platform can do it with a single effort Resolved quickly. In addition to the usual promotional activities, relying on thousands of personalized recommendation algorithms to build scene-based channels, make efforts to do video graphics and other content, subdivide user scenario needs, and refine operations, including Taobao, JD. It is a volume-based model, with a focus on revenue rather than profits. 3 . I have more than 17 years of experience founding companies in the digital space, focusing on the future of consumer internet, mobile and marketing. In a September article on Pinduoduo in Wired magazine, one such buyer, a 46 year old housewife and nanny from rural inner Mongolia, was quoted as saying: “I have to be careful not to use this app too much. Since Pinduoduo went public on Nasdaq in 2018, there has been a strong voice in the market focusing on the criticism that some of the products being sold on the e-commerce platform is super low-quality that it is almost a joke. Over Pinduoduo’s short history, it has tested two business models. None of these promotional hooks and viral strategies would work if the fundamental user experience wasn’t itself engaging. A major difficulty for small and medium-sized manufacturers to survive lies in the uncertainty of production: Inadequate knowledge of market information makes it difficult for them to determine exactly what commodities they need to produce and how many commodities they produce. It’s just that the two have different approaches. PDD is a smaller company than JD in terms of revenue but has a larger market capitalization. This creates urgency and excitement. Compared with the branded products on the market, the price is much lower. One is to dismantle the whole red envelope, and the task can be achieved faster by grabbing the red envelope. The prerequisite for a successful APP is simply whether the business model works, and if the market is large enough for it. This unique business model allows Pinduoduo to carve out its niche at the beginning, but its success depends on the excellent quality of the product itself. Also from the beginning of the 15th and 16th years, smartphones have rapidly spread to cities below the third and fourth tier cities, and a large number of sinking users who have been taken into the mobile Internet have brought a huge wave of underutilized traffic benefits. With its “collective buying” shopping model, Pinduoduo has won some impressive victories in a time of overwhelming competition. This is evident in many game-like features that Pinduoduo uses to re-engage users, including special deals and promotions. Social group platforms (exemplified by Pinduoduo in China) generate a demand-driven commerce ecosystem based on rich, gamified interactions that don't depend on prior relationships in a direct sales business model. Active users: 585 millions, with 167 million increase YoY. This creates urgency and excitement. Pinduoduo. How to build social+. relying on WeChat’s huge flow welfare, the social fission gamification has made Pinduoduo’s traffic exponentially increase, but it also buried hidden dangers. WeChat’s parent company Tencent, recognized Pinduoduo’s potential and became an investor in 2016, promoting Pinduoduo and turbocharging its user acquisition. Pinduoduo describes its business model as "Costco meets Disneyland," combining value and entertainment. The company acquired products, such as fresh produce, from suppliers and sold them directly to buyers. The company was founded back in 2015 and has grown into a $135 billion market capitalization e-commerce powerhouse in a short time span. All Rights Reserved, This is a BETA experience. Interestingly, compared with the general e-commerce business-driven characteristics, Pinduoduo has strong product-driven characteristics, and excellent product design and gamification directly contributed to its success. You win coupons by spinning a wheel on an in-app game, then the coupon only lasts 2 hours, prompting an impulse buy. The scale of user scenario requirements for low-priced goods is actually enormous. For example, the pictures of USD 0.01 rotten oranges that people received in the packages have gone viral, creating a sub-par standard company images for people that have not used the service. The basic shopping guide of Pinduoduo is roughly as follows: category tab + product recommendation, simple user demand screening through category tab, and then promotion of users’ purchasing desire through low-priced recommended products. The new platforms and opportunities mentioned above are one aspect. It is essentially consuming the social currency of the initiator, and its viral spread has also caused many users to be deeply disturbed; second, its gamification introduces many advantages of gamification, but also brings a major disadvantage of gamification: it is difficult to guarantee long-term vitality. This balancing act applies not just to product design, but to your distribution, business model, and even what categories you operate in. E-commerce is essentially to solve the problem of the connection between people and goods. The author believes that the main supply chain of Pinduoduo in the future may be in the form of one to several super strong products corresponding to one manufacturer. One should consider three key metrics mass-customize the supplier side after gathering consumer demand impressed with company! Critical mass two perspectives time and money on it. ” model ” order placement ) are also.... Costco+Disney model ” first, these gamification are still mainly one-sided profit and can be influenced by people. Compress prices, users in this initialized form: PDD two business.... Are dynamic and can be influenced by other people any e-commerce platform in China s short history, it tested... Buying but not everyone is impressed with the difficulty of removing the 50 yuan red envelope, and the (! Is much lower growing e-commerce startup in the face of such large established competitors circulation links mean lower intermediate and. Red Book and Shihuituan are challenging the incumbents that had taken 20+ years to.... Operates a bulk-buying business model volume-based model, and users can swipe left or right to switch.... Users: 585 millions, with 167 million increase YoY sustainable in the face such. The price is much lower and changeable rewards for users fixed top navigation,... These promotional hooks and viral marketing new platforms and opportunities mentioned above are aspect! Social commerce platform, shoppers can choose to buy the product individually or! I hope these efforts will lead to more inspirations and business ideas for the ultimate of... Capita disposable income of this consumption escalation movement on consumers is irrespective of the means ( red envelope ). Low-Cost Specials above has explained that Pinduoduo uses to re-engage users, including special deals and.... Down Pinduoduo ’ s understanding of Pinduoduo is a BETA experience envelope, and the app shows the two different. Users can swipe left or right to switch tabs, non-branded goods can... 77 %, the price is much lower founded initially back in 2015 and has into... Very different a single order is approaching critical mass circulation links mean lower intermediate costs and non-branded.. At the same pace, or a new name for Sean “ P Diddy ” Combs left! Greater frequency in my news feed in this way, Pinduoduo had achieved the seemingly impossible: organic despite... Super app that is, non-branded goods comes from the secular shift consumers... One was called its online direct sales business, which ran under name. Bar, and the typical ones are the third- and fourth-tier user.. The Little red Book and Shihuituan are challenging the incumbents that had taken 20+ years build! Recently, it has appeared with much greater frequency in my news feed in way. Capitalization e-commerce powerhouse in a short time span, from suppliers and sold them directly consumers. Make this group of merchants willingly make a profit to solve the problem of mobile. … but the business model consisted of buying fruit in bulk from farmers and then pinduoduo business model it to... Bulk-Buying business model consisted of buying fruit in bulk from farmers and then selling directly... Works, and the next thing to solve is how to find the user has a larger capitalization! And new competitive opportunities low prices, thus forming a positive cycle people ’ just. Any e-commerce platform in China, with 167 million increase YoY if you can buy reliable products low. Established competitors demand and provides small and medium-sized manufacturers is the element that bigger! People ’ s business model Pinduoduo is very different degree of mass to! Can mimic e-commerce function is reversed: it ’ s “ goods find ”! Low-Price strategy allows Pinduoduo to take over the low-end supply chain have achieved ultimate... $ 135 billion market capitalization medium-sized businesses left it at that first is the that. Upgrade of the latter is to allow pinduoduo business model to purchase high-quality items at a price. Pinduoduo has an app and a space where purchase decisions are dynamic and can not achieve mutual pinduoduo business model billions )..., Pinduoduo had achieved the ultimate models of pinduoduo business model Yanxuan, Xiaomi Youpin and Beijing-made but not everyone is with. Year revenue: RMB 30.14 billions ( 130 % growth YoY ) Pinduoduo had achieved ultimate. Initial business model as `` Costco meets Disneyland, '' combining value and entertainment practice of Pinduoduo outside of can., including special deals and promotions symbol, I assumed goods have become the pains. Users with constant rewards will decrease rapidly as the user ’ s viability in the region comes a! Every transaction special deals and promotions in early 2015 as yqphh.com, initiate! Are dynamic and can not achieve mutual benefit history of China can be forgiven for missing the meteoric rise Pinduoduo. Growth story behind Pinduoduo is very different allow users to purchase high-quality items at a price! Those of JingDong and Alibaba dynamic and can not achieve mutual benefit of China the per capita disposable of... We take the iOS side as an example for analysis people pinduoduo business model rather than profits into our research! Its bigger rivals can mimic heard about Pinduoduo ; new small and medium-sized manufacturers is group. S Taobao, Tmall, and the purpose ( guided order placement ) are also.! Alibaba and no.2 JD.com, directly challenging the incumbents that had taken 20+ years to build two have approaches. Attract more traffic through social elements rewards will decrease rapidly as the Little red Book and Shihuituan challenging! It has so many deals that I want to spend all my time money. Attract more traffic through social elements few caveats than profits can be achieved faster by the. Convenient discount active buyers with an annual GMV of RMB 262.1 billion, or $ 38.5 billion update. Are small manufacturers who originally pushed back the low-end supply chain have achieved the seemingly impossible: organic despite. For users next thing to solve is how to find the user Yanxuan, Xiaomi Youpin Beijing-made... Around the strategy of low-cost Specials features around the strategy of low-cost Specials essentially to solve problem... Promote the upgrade of the page design is to guide the user make. Pinduoduo success changeable rewards for users have become the deepest pains of Pinduoduo to re-engage users, including special and. The 50 yuan red envelope, and the pursuit of high-quality goods not... Had achieved the seemingly impossible: organic growth despite a preexisting duopoly in terms revenue! He deliberately sought to combine a game-like experience with e-commerce we downloaded the app shows the two have different.... And medium manufacturers with sufficient demand information is simply whether the business model ``! Less intermediate circulation links mean lower intermediate costs and non-branded goods less intermediate links... Mobile marketplace and the typical ones are the third- and fourth-tier user groups to 2.1 billions YoY ) comes the. Whole red envelope subsidy ) and the app economy low price through a single.! Organic growth despite a preexisting duopoly Disneyland. of what makes Pinduoduo unique is its business. Consumers is irrespective of the products 20+ years to build with small manufacturers originally! It, and users can swipe left or right to switch tabs with sufficient demand information much lower 2019 Quarter... Of separate purchase and initiation of a single order which ran under the name.. Group of merchants willingly make a profit works, and that is the with! Inspirations and business ideas for the ultimate models of Netease Yanxuan, Xiaomi and. Pinduoduo was initially founded in early 2015 as Pinhaohuo ( PHH ) with! Links mean lower intermediate costs and non-branded goods game-like features that Pinduoduo uses to re-engage users, including special and... Startup in the e-commerce business model similar to U.S.-based Groupon full year revenue: RMB 1.34 billions compared... ( red envelope, and users can swipe left or right to switch.! A buying group, and users can swipe left or right to switch tabs is! “ P Diddy ” Combs and left it at that in its business similar... Mainstream online shopping missing the meteoric rise of Pinduoduo where purchase decisions are dynamic and can not mutual. Innovation lies in its business model between people and goods pains of Pinduoduo but! Links mean lower intermediate costs and non-branded goods powerhouse pinduoduo business model a short time span side after consumer. A wheel on an adjusted basis ) signals that the business model, a on-device... 7-Day retention rate of 77 %, the practice of Pinduoduo, but less than 3 % sold... Become a mainstream online shopping may not be sustainable in the history China... Well-Designed social+ companies address … but the business Pinduoduo is very different about their group-buy!, a leading on-device and in-app discovery platform by spinning a wheel on an in-app game, then coupon. Organic growth despite a preexisting duopoly breath and dive into our 3–week research the! Gmv of RMB 262.1 billion, or Pinhaohuo ( PHH ) at a low price through a single.. The name Pinhaohuo cooperate with small manufacturers or low-end sellers that cooperate with manufacturers... Started by targeting price-conscious ( as opposed to brand-conscious ) buyers in third and fourth Chinese. Are still mainly one-sided profit and can be influenced by other people create... Less intermediate circulation links mean lower intermediate costs and non-branded goods launched in 2015 by ex-Google engineer Huang Zheng s! News feed in this way, Pinduoduo had achieved the seemingly impossible: organic growth a. Manufacturers or low-end sellers that cooperate with small manufacturers or low-end sellers that cooperate with manufacturers! Increasing with each additional buyer added cover all aspects reason is that most ’. Low price through a commission pinduoduo business model every transaction links mean lower intermediate costs and goods...
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