What is Pinduoduo?
Pinduoduo (拼多多) is the largest interactive e-commerce platform in China and in the world. It is the third-largest online marketplace behind Alibaba and JD.com in China.
It has pioneered several new trends that have revolutionized online shopping in China including:
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- social e-commerce
- team purchase
- consumer-to-manufacturer (C2M)
Founded in 2015, Pinduoduo has become the fastest growing tech company in the world. In 2019 Pinduoduo has generated over RMB 1 trillion gross merchandise value (GMV), 585.2 million active buyers and an average daily order of 54 million parcels in 2019.
How Pinduoduo is helping small businesses and farmers?
Pinduoduo’s help in the agricultural sector
In the agricultural sector, the traditional supply chain faced severe stress after the pandemic disrupted the flow of labor and logistics, threatening the journey of food from farm to table.
Pinduoduo (PDD), China’s largest agricultural e-commerce platform, stepped in to bridge the gap by connecting producers directly to consumers. In fact, with digital platforms, the availability of real-time information can enable small companies and farmers to get detailed insights and make better decisions.
- The company used its team purchase model to aggregate demand from its more than 600 million consumers for agricultural produce, helping farmers sell their perishable crops.
- PDD also provides local governments and farmers with insights on consumer preferences so that they can better plan and market their products.
- Pinduoduo is hosting the global agriculture competition to bring the farming and tech community together.
In 2019, Pinduoduo had over 360,000 merchants from national-level poverty-stricken counties selling on Pinduoduo and its GMV for agricultural products reached 136.4 billion yuan ($19.3 billion).
The PDD’s “Smart Agriculture Competition”
The Smart Agriculture Competition is organized by Pinduoduo and the China Agricultural University, with technical support from the Food and Agriculture Organization (FAO).
The competition, which has already attracted interest from almost 40 teams worldwide, has the aims to help the agriculture sector in the country embrace digitization by exploring the use of the latest technologies.
Participating teams with experts from all over the world will compete in the cultivation of the best strawberries. Winners will be determined based on:
- the economic value created
- the reliability
- technical merit of the agritech solutions deployed.
The preliminary round is on June 15. Wageningen University & Research from the Netherlands, the University of Florida from the U.S., corporate teams from Ridder Group and Syngenta and Agricultural universities and institutes in China from Shenyang, Sichuan and Shaanxi are among the 17 teams shortlisted for the first round.
The winners of the challenge will receive:
- research funding
- implementation support at a Duo Duo Farm in Yunnan
- academic and commercial support from PDD
What is the Duo Duo Farm?
The Duo Duo Farm is an initiative by Pinduoduo to empower farmers to keep more of the economic value in the supply chain of agricultural products. By collaborating with local administrations and agronomic researchers, Duo Duo Farms aims to improve the economic livelihood of merchants.
Duo Duo Farm as guide on how to sell on the Pinduoduo platform for farmers
Pinduoduo provides week-long training sessions in rural Yunnan to equip farmers with important skills, such as understanding of:
- business operations
- online marketing
Through this training, farmers can sell their products directly on the Pinduoduo e-commerce platform. The platform connects farmers directly with consumers, without relying on layers of intermediaries in the traditional supply chain, allowing farmers to earn a better living and consumers to buy at lower prices.
For example, when Farmers were sell yacon (a fruit that resembles a large potato and has an apple-like taste, which was largely unknown in China before PDD introduced it to the market) to distributors for 0.5 yuan/kg, then, distributors were reselling the fruit for over 4 yuan/kg. Excluding expenses for logistics and labor, distributors were still making a profit of 1.8 yuan/kg.
This showed how much distributors more than farmers by selling on Pinduoduo, that’s why PDD introduced the Duo Duo Farm in early 2019.
Duo Duo Farm leads to talents development
As the demand for fresh products from these provinces on Pinduoduo increases, more jobs are created (such as agriculture, packaging, delivery and e-commerce store operations).
Thanks to the new job opportunities created by Pinduoduo in rural areas, the younger generations can return home to earn a living.
Given their urban experience, these people are more tech-savvy and knowledgeable about the benefits of e-commerce, which can help alleviate poverty in rural areas.
Agritech is a great area of interest for investors
COVID-19 has not only disrupted traditional supply chains, but it has also challenged food systems and exposed hidden bottlenecks and cracks that could break. It is therefore not surprising that interest in investments in agritech is growing.
Covid-19 has made agritech investing a greater area of interest for a investors like Big Ag and Big Food corporations to family offices and governments.
Interest in plant-based meat
There are 2 main reasons why plant-based meat is gaining interest:
- Plant-based meat is an assembly process in which conveyor belts, machinery etc. can be used.
- In these times, meat of vegetable origin can be produced more reliably and safely and is an important alternative for consumers.
In fact, also due to covid-19, Chinese consumers are paying much more attention to the health benefits, scientific merits of the food they are eating.
Duo Duo orchard a game which contributes to poverty alleviation in rural China
Duo Duo Orchard has been incredibly popular since it launched in 2018. Pinduoduo gave out over 500,000 kilograms of free fruit every day, benefiting not only consumers but also growers in rural areas.
In fact, as more consumers plant virtual trees for the reward of free fruit from Pinduoduo, growers receive more orders for their harvests.
It aims to encourage consumers to interact and share while they shop on Pinduoduo. It has become a popular feature where users can grow virtual fruit trees for a free box of fruit.
Over 11 million daily active users (DAU) log on to the game to water their trees. It is an effective channel for incentivizing consumers to purchase and to allow users to interact and enjoy the fun of shopping with friends.
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