Pinduoduo, the next Chinese e-commerce giant ?

Do you know what is Pinduoduo (拼多多) ?

If you don’t, this article may be useful, you will hear about it sooner or later!

Founded in 2014 by the former Google engineer Colin Huang, Pinduoduo (or PDD) is one of the most fast-growing Chinese unicorn.

Concept

The APP (that you can download here) lets people shop together and earn group discounts, on (mainly) affordable products. The users participate in group buying deals mostly via WeChat.

From an Occidental digital point of view, the concept of PDD is a mix between Facebook (for the social) and Groupon (the discount aspect); but from a Chinese digital perspective, PDD took the social world from WeChat, and the marketplace ecosystem from Alibaba, Taobao and Tmall. (click here to learn how to create a Taobao Account ).

In terms of User Experience, « Huang’s idea is to give shoppers an experience more like spending a day at the mall with friends. » according to Bloomberg.

Utilization

In concrete, each product has two prices (photo hereunder). The first price is when you buy alone, and the second price includes the discount. To have the discounted price, you have to purchase the product with a friend that you have invited.

Most of your payment will be done via WeChat Pay. You just have to enter your information the first time you pay, and after this first purchase, you won’t have to enter your password anymore and will be able to do one-click payment.

Also, PDD provides coupons, which are very common elements on Chinese APP. But their particularity is that they are very time-limited. Their duration only last only 2 hours. So if you want to buy something, buy it now, otherwise, you will miss the opportunity to make interesting deals.

Fast growing Platform

To make his company grows, Huang raised 8 million dollars in 2015 and 110 million in February 2016. The company was evaluated at more than 1,5 billion dollars in 2017. Tencent Holdings was one of the investors.

With over 200 million registered users in 2 years, Pinduoduo is the fastest growing App in the history of Chinese Internet, according to the WeChat Official Account Walkthechat.

And, according to Cheetah Mobile, Taobao was 2017 the number one e-commerce platform in China in 2017, followed by Pinduoduo, who succeeded to go over JD and VipShop (knowing that In 2016, PDD was just behind Vipshop, the 3rd Chinese e-commerce platform).

In April 2017, Huang said: “We think we will pass them in the next 12 to 18 months”, and in fact, Pinduoduo passed from 100 million RMB a month in 2016 to 4 billion RMB a month in 2017. Huang is making his prediction happening.

To conclude, we can say that the Pinduoduo Business Model can be considered as a real threat for the existing e-commerce platforms (especially JD and Vipshop) in the coming years, and a way for Tencent, leader of the social ecosystem, to challenge Alibaba on the e-commerce platforms market.

 

By | 2018-02-03T23:13:27+00:00 February 3rd, 2018|Categories: Apps, Chinese E-Commerce Plateforms, Digital Business, eCommerce|0 Comments

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