Pinduoduo

Founded in 2015, Pinduoduo has become the fastest growing tech company in the world.[5] In Q1 2017, the company ended its online direct sales model of acquiring fresh produce and other perishables from suppliers to sell to consumers, and transitioned to purely providing online marketplace services to third-party merchants.[6] This change from a first-party model that takes inventory and sells to consumers, to a third-party facilitator to connect consumers and merchants marked the start of explosive growth for Pinduoduo.

Pinduoduo is known for its interactivity and value-for-money offers that has been described as a combination of the best features of Costco and Disney. One special feature is its use of team purchases[7], where consumers form “teams” of at least two to get a lower price. The format has been so successful that most other e-commerce platforms in China have copied it and introduced similar versions of team buying. While team purchase was the main reason for Pinduoduo’s rapid growth, a significant enabler of Pinduoduo’s virality was the widespread use of WeChat as a platform in China.[8]

Team purchase is built upon a distributed AI infrastructure where user behavior could be influenced by their circle of trust and environment. This helps to aggregate demand to lower down the cost of production and logistics.[9]

It is also the biggest online marketplace in China for agricultural produce, and is known for applying consumer insights to help revamp the traditional supply chains to benefit both consumers and producers. Pinduoduo launched its Duo Duo Farms initiative in April 2019 to help farmers in impoverished counties in China improve their productivity and find new sales channels online. [10] In 2019, it sold RMB 136 billion worth of agricultural goods, constituting 13.5% of its total GMV for the year.

The number of active buyers of agricultural products on Pinduoduo surpassed 240 million in 2019. In the first quarter of 2020, Pinduoduo helped open more than 270,000 new agriculture-related online shops.[11]

Pinduoduo has actively promoted the concept of "consumer to manufacturer" which they call C2M.[12] They share consumer insights with brands and factories so that they in turn can produce products users need the most. By cutting down on unnecessary production, less resources are needed and the cost savings can be passed on to consumers.

Pinduoduo has made a few investments and partnerships with both international and Chinese retailers.

In late Nov 2019, Amazon.com Inc opened a pop-up store on Pinduoduo to coincide with its Black Friday Sales[13]. The pop-up lasted through the end of December and featured a selection of 1,000 products from Amazon’s global stores. The partnership gave Amazon access to Pinduoduo’s user base in lower tier markets while helping Pinduoduo to expand its premium product offerings[14].

In April 2020, Pinduoduo made its first strategic investment by subscribing to US$200 million in convertible bonds issued by Gome Retail Holding, a major household appliance and electronics retailer in China[15]. The bonds are convertible at  HK$1.215 per share, which translates to around 1.28 billion of Gome shares or a 5.6% stake on a fully diluted basis. This investment is expected to strengthen Pinduoduo’s position in the household appliances and electronics sector and also accelerate its push into C2M, with more tailor-made appliances made available to its users[16]. As part of the deal, Gome’s entire product range would be listed on Pinduoduo and its logistics, delivery and assembly services would also be integrated.

• On June 7, 2018, China Legal Evening News reported that "there are many illegal and violent goods involved in the law," and you can buy cheap goods, and there are many commodities that involve pornography, violence, and illegal activities. Including the blade knife, pseudo base station device, motorcycle license plate and inflatable doll, etc.[17]
• On January 20, 2019, the company reported theft of online discount vouchers worth tens of millions of yuan.[18] An online collective of users exploited a loophole in Pinduoduo's system and stole tens of millions of yuan worth of discount vouchers. The company notified the police about the incident.

• Official website