Additionally, the farmers can then also promote their produce through the platform’s live streaming solution. Lastly, Pinduoduo itself also offers various training courses to established and new farmers. Third, Pinduoduo has also managed to significantly decrease its operational cost by launching its own logistics and payment service (Duoduo Pay). Previously, the company had to pay Alibaba and WeChat whenever a customer used its wallets (Alipay and WeChat Pay, respectively). Another source of income for Pinduoduo comes from transaction services, which are the commission fees it charges merchants when a purchase is completed.
Online Marketing Services
In addition to empowering producers by connecting them to consumers, the supply chain is built in direct relationship with the actual needs of the market, making for a sustainable business model. What makes Pinduoduo so reliable for the common person is this power of relatability. The platform is built, run, influenced, and validated for and by people like you and me. This by and large works wonders in specific communities and for people residing in tier two and three cities who aren’t as exposed. If you are still wondering what is social commerce, check Ethereum cfd out this video below.
China’s e-commerce giant Pinduoduo quietly launches U.S. shopping site in Amazon challenge
Consumption upgrade, a trend in which affluent Chinese customers are increasingly willing to pay for quality, has dominated China’s e-commerce industry in the past few years. Taobao and JD’s globalization initiatives to bring overseas quality products, the boom of cross-border e-commerce sites like Red and NetEase Yanxuan and Kaola are all based on the consumption-upgrading backdrop. Although the country’s e-commerce market is highly consolidated, it’s not impossible for startup teams to crack this market as long as they are solving the right problems for the right group of customers. Last August, the company started Duo Duo Grocery which is a next-day grocery pickup service that allows users to order products online and collect them from designated pick-up points the next day.
3 Pinduoduo adapts a C2M model
The investment will see GOME’s product range, logistics and after-sales customer support integrated with PDD. On Chinese social media, some cybersecurity experts questioned why regulators haven’t taken any action. Pinduoduo’s apparent malware would be a violation of those laws, tech policy experts successfully outsource software development say, and should have been detected by the regulator. Of the six teams CNN spoke to for this story, three did not conduct full examinations.
TuSimple co-founder demands liquidation, sues company for control of his shares
His previous startups include consumer electronics e-commerce site Ouku.com, Leqi, e-commerce platform marketing agent service and a WeChat-based role-playing game company. Cost performance is still the most important factor to consider for consumers. A higher price tag does not necessarily represent the better quality or vice versa. The huge potential in this often-overlooked market is luring more competitors. Due to its robust business model, Pinduoduo has managed to increase revenues from just over $2 billion in 2018 to $14.7 billion in 2021.
- This time, in April 2018, mostly existing investors poured in another $1.4 billion into the company, valuing it at $15 billion.
- The company’s first ever quarterly net profit was recorded in the second quarter of 2021.
- “Probably none of our regulators can understand coding and programming, nor do they understand technology.
- Not only were users able to post Pinduoduo links within the messenger but WeChat actively blocked the insertion of links from competing platforms like Alibaba’s Taobao Marketplace.
- The business model of Pinduoduo is dependent on users sharing products with their network, which effectively lowers the customer acquisition cost.
For the fiscal year 2020, Pinduoduo recorded revenues privacy policy of $9.1 billion, up 97 percent from the year prior. When Pinduoduo went public in July 2018, it was able to raise an additional $1.6 billion. After posting its first quarterly profit in August 2021, Pinduoduo also pledged to give away a total of 10 billion yuan ($1.5 billion) to aid its farmers.
As Pinduoduo gets into life as a public company, the firm is following the e-commerce giants in cleaning up the platform. The company set up an RMB 150 million ($22 million) fund to deal with after-sales disputes. Although Pinduoduo claims to have several channels to lower product prices, increasing product quality and counterfeit complaints still raise concerns for a possible low-cost and low-quality association. Complaints mainly target at the problems of poor quality, slow delivery, misleading ads, etc. Digital economy observers outside of China can be forgiven for missing the meteoric rise of Pinduoduo.
According to Toshin, the exploits allowed Pinduoduo access to users’ locations, contacts, calendars, notifications and photo albums without their consent. They were also able to change system settings and access users’ social network accounts and chats, he said. According to the source, who requested anonymity for fear of reprisals, the company only targeted users in rural areas and smaller towns initially, while avoiding users in megacities such as Beijing and Shanghai. It was in 2020, according to a current Pinduoduo employee, that the company set up a team of about 100 engineers and product managers to dig for vulnerabilities in Android phones, develop ways to exploit them — and turn that into profit. It succeeded by offering steep discounts on friends-and-family group buying orders and focusing on lower-income rural areas. The revelations are also likely to draw more attention to Pinduoduo’s international sister app, Temu, which is topping US download charts and fast expanding in other Western markets.
Then, in March, co-founder Huang stepped from his role as chairman to follow his passion and set up research labs on biotechnology in cooperation with Chinese universities. Days after his departure, Pinduoduo finally surpassed Alibaba in terms of annual buyers with 788 million (compared to Alibaba’s 779 million). Diaper maker Daddy’s Choice filed a complaint with a federal court in New York, stating that Pinduoduo knowingly allowed the sale of knockoff products.
