There are lots of e-commerce marketplaces in china. So if you want to sell your products online, you have many choices possibilities, possibly too many and a little overwhelming to be honest. Alibaba and have been in a war over the Chinese e-commerce space for a decade or so, but a third player, Pinduoduo has managed to shake up the duopoly in recent times and has replaced JD for the second largest e-commerce platform in China.

What is Pinduoduo?

Pinduoduo is a group-buying e-commerce platform that was founded in 2015 by Colin Huang an ex-Googler. It dawned upon Huang that despite the dominant market positions of Alibaba and in China’s internet space, it is still possible to compete with them head-on if he could address the needs of the segment of Chinese consumers, who are essentially ignored by the titans of the industry.

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How does Pinduoduo work?

PDD’s group-buying groups

Pinduoduo got the attention of the under-served, price-sensitive consumers by presenting them with a proposition they could not turn down. For a dress that is priced at RMB 39 on Taobao, one only needs to pay RMB 19 on PDD: and if one can invite 5or 6 friends to buy as a group, the unit price falls to only RMB 9.9 including delivery. The process of inviting friends to join is made very easily on Tencent’s Wechat messaging platform. As folks join in this viral game of seeking deep group discounts, they sign onto PDD’s apps without much noticing it.

The fact that Pinduoduo was able to quickly penetrate the previously under-tapped market segment is thanks to the help of at least two other key factors – Xiaomi and other domestic manufacturers marketed a series of low priced smartphones that allowed people from the countryside connect via mobile to the internet.

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Pinduoduo’s market cap hits $100b in 5 years

Despite the controversies, relating to the quality of its products. PDD’s stock prices shot up by more than 30%  on the first day of trading and its market value reached nearly $USD 30 billion, or more than half of The Chinese social commerce startup has hit USD 100 billion in market capitalization in less than five years.

Number of monthly active users of Pinduoduo Inc. — Data from Statista

According to data from Statista, in only 5 years, PPD’s monthly active user base reached 568.8 million, making it probably the world’s fastest-growing company in terms of client acquisition. As PPD’s user base expanded, its trading volume also grew exponentially. In the twelve-month period ending 30 June 2018, PDD reported a GMV (gross merchandise value) of RMB 262.1 billion or USD 39.6 billion which represented a whopping 583% increase from a year ago.

The reality is that there are approximately 1 billion Chinese living in small cities and townships and they are much more price-sensitive than the shoppers you meet at the Gucci store in the first or second-tier cities. In terms of sales, PDD  took a more rural tack and has built a reputation for hawking ultra-cheap goods at small city consumers.

PDD’s achievement published on PDD’s Weibo official account in Poverty alleviation launched by the government

The group-buying agricultural products directly from producers without intermediary on PDD is very popular right now in China. The sales of agricultural products in 2019 have reached 136.4 billion yuan and this number is expected to pass over 250 billion in 2020.

Pinduoduo set foot in real estate group-buying via live-streaming

The giant e-commerce behemoth is apparently very ambitious and not going to stop in what it has achieved. Pinduoduo and Haiya Group have jointly launched a live-stream for group purchases of real estate in China.

This new type of selling properties has reached a record high sale of 1122 transactions in only 24 hours! The success of this event allowed Pinduoduo to realize another successful expansion of its group-buying empire. and Alibaba staged a two-strong competition in June 2020 in terms of live-stream real estate sales. When everyone thought Pinduoduo was absent, he suddenly popped up and did something successfully.

Live-streaming: a new selling method applied by Pinduoduo

The mayor of Anhui Provence is selling local agricultural products via PDD’s live-streaming platform

PDD’s group-buying attribute promoted by the live-streaming trend is favored not only by farmers and retailers but also by those local governments who have mission to help local people to get out of the property.

As the Internet can be accessed to everyone, even to those who live in the deep mountain areas, PDD’s live-streaming can link those producers in third and fourth-tier cities with those more developed cities like Shanghai and Beijing.

At the same time, live-streaming has become a new battlefield for businesses and various platforms in China. In fact, live-selling has become the mainstream retail method of e-commerce platforms. Data show that in 2018, Taobao live-streaming platform brought in more than 100 billion yuan, a year-on-year growth rate of nearly 400%, that is to say, 81 live-streaming rooms brought averagely more than 100 million yuan in revenue, almost equivalent to the sales made by a successful company.

If you are interested in PDD and you want to know how to sell your products or services on PDD, feel free to contact GMA, an expert in Chinese digital marketing and a professional e-commerce agency.

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