In Love With Health

Pinduoduo the fastest growing platform in China

This was Pinduoduo’s first ever annual operating profit since becoming a public company. Similar to most other early-stage e-commerce stocks, Pinduoduo was unprofitable for around 5 years after launching. The company’s first ever quarterly net profit was recorded in the second quarter of 2021. The GMV basically represents the value of the total amount of goods purchased on the company’s platform.

  1. Pinduoduo’s annual GMV (gross merchandise volume) surpassed RMB100 billion ($14.7 billion) in 2017, that’s around two years since its inception.
  2. A large part of PDD’s user base is from smaller Chinese cities where there are perhaps more price-conscious consumers.
  3. Consumers can share product details with family and friends to form a shopping team and enjoy a more attractive price option.

According to 2022 market data, Pinduoduo surpassed as the second-largest Chinese e-commerce platform. With over 751.3 million monthly active users engaged in online shopping, it’s only natural for global product managers like you to develop an interest in the app. Its mobile platform provides buyers with a wide selection of merchandise as well as an interactive shopping experience, while enabling sellers to seamlessly connect with customers.

Allowing users to invite other buyers increases user engagement, which gives PDD its unique social shopping experience. Features such as group buying and free products enable the same function as shopping in real life. The advantage of PDD over other social commerce channels in the country is its consumer-oriented approach. It offers products at up to 20% cheaper compared to their market price by letting users directly purchase from manufacturers.

Surveillance of former employees

Comparatively, the forward price to sales multiple for peer e-commerce companies such as Etsy and Hello Fresh stand at 30x and 29x respectively. Analysts tracking Pinduoduo have an average target price of $70.55, which is around 10% above its current trading price. The total gross merchandise volume (GMV) on the Pinduoduo platform has increased from US$72.75 billion in 2018 to $383 billion in the 2021 calendar year. And last year, JD rolled out a group buying app called Jingxi, which is also accessible through WeChat.

“If you close your eyes and visualize the next stage for Pinduoduo, it would be a combination of ‘Costco’ and ‘Disneyland’, driven by a distributed network of intelligence agents,” Huang wrote in the IPO prospectus. Huang’s comparison was thus interpreted as a combination of “value for money” and entertainment, but many are questioning whether or to what degree Pinduoduo can live up to the founder’s expectation. Depending on your brand’s industry, PDD will require you to pay between 10,000 yuan and 50,000 yuan as a deposit fee.

Pinduoduo’s history and major milestones

Collaborating with KOLs can give your brand or product a boost in reputation and credibility. Pinduoduo is now valued at a market cap of $81 billion which means its forward price to earnings multiple stands at around 32x. Chun also noted that Alibaba and JD are building up relationships with factories for the C2M model of business. And with the Alibaba’s strong cloud computing business, it “may have more to offer to the factories” in terms of digital capabilities, Chun said.

3 Pinduoduo adapts a C2M model

Last year, it also pioneered a new initiative on Taobao called 99 Temai, which featured budget goods costing between 1 and 9.9 RMB, with free delivery. With all of this said, Pinduoduo wasn’t the first major ecommerce player to provide economic opportunity and support to rural parts of China. In 2014, Alibaba launched ‘Rural Taobao’, a programme aimed at cultivating talent and building infrastructure in rural areas to support ecommerce businesses. Pinduoduo has made agricultural products core to its offering from the word ‘go’ – not just by providing a platform, but by offering training, resources, information and funding.

“They don’t really understand how the other makes money,” Huang said to Bloomberg. And because these people will represent your brand or product for a period of time, it’s mercatox review wise to work with ones who have a genuine interest in your offerings. Doing this also ensures that you’re tapping into the right target audience for your business.

This active user base also attracts merchants to Pinduoduo and the scale of its sales volume allows the latter to offer competitive prices thereby creating a virtuous cycle. Like Alibaba’s Taobao and rival, Pinduoduo is an e-commerce platform that offers a wide range of products from lexatrade review daily groceries to home appliances. Pinduoduo’s twist lies in its integration of social components into the traditional online shopping process, which the company describes as the “team purchase” model. The Shanghai-based company just went public raising $1.6 billion through a U.S.

Pinduoduo users can invite friends and family on social media to join a group deal in order to generate discounts. By purchasing in groups, price-conscious shoppers attain more competitive prices. Shoppers are offered lower prices if they can team up fusion markets review with others to buy the same product, which incentivises them to share Pinduoduo and encourage their friends, family and colleagues to buy items. As a result, WeChat, China’s most popular messaging app, has been a major driver of growth for Pinduoduo.

Over 36% of users in the app’s system reside in fourth and fifth tiers or below. This demographic data clearly shows that Pinduoduo’s user base comes from rural areas with moderate to low cost of living. One price is for individual buyers while the other is for community group purchases, and is generally lower. This incentives users to bring friends and family onto the platform in order to access cheaper prices. Newer competitors are also looking for a slice of the discount pie, with Douyin opening an online store called “super cheap little shop” on its ecommerce platform, Douyin Mall, in 2023. Douyin also operates an agricultural store – further encroaching on Pinduoduo’s territory.

Every friend that clicks on the link (no purchase required) drives an incremental discount for the initiator. Since the listing of the Pinduoduo Inc ADR on the NASDAQ in July 2018, the Pinduoduo stock price has increased by more than 100%. Here’s a look at how the platform works, its financial performance and how it competes with Alibaba and JD. Set up a store for free on the Pinduoduo Seller app with a phone number and a verified ID card.

Lisa van Cuijk

Oprichtster van In Love With Health

Het is mijn doel om met In love with health mensen te inspireren en helpen met het behalen van hun gewenste doelen en dromen! Wil je net als ik fitter worden en een positief gevoel hebben? Wil je wat kilo’s kwijt of gewoon wat strakker worden? Wil jij eindelijk weer zelfverzekerd en gelukkig zijn? Stop dan met al die nare diëten en shakes en verander ook jouw lifestyle.

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