In a similar vein to Google’s PPC advertising, Pinduoduo merchants can also bid for keywords to have their product listings show in search results. In April 2021, Pinduoduo surpassed Alibaba to become China’s largest eCommerce site in terms of annual active users. Four months later, the company posted its first quarterly profit of $372 million. Finally, good old SEO, PPC, and banner ads can help build up your brand image and draw an audience to your online store. Like Google and other Western search engines, China’s Baidu uses its own algorithm and SEO signals. Using Baidu best practices will help you generate buzz and increase traffic to your online store.

●     Install and Download the App on Your Phone

• Being a highly-frequented marketplace with hundreds of millions of users also allows Pinduoduo to charge the supplier for promoting their goods and services.
• More users lead to higher purchase volumes, which in turn lowers the production and supply chain costs.
• For example, shipping goods from China to Ukraine may require additional time.
• Therefore, a social chat platform like WeChat acts as a crucial weapon for Pinduoduo to build a good “word-of-mouth” and ultimately facilitate the social sharing function.

That’s also where he ended up meeting Chen Lei who joined Oukou as an architect engineer and followed Huang in the subsequent businesses he would incubate. The first time you pay for something on Pinduoduo, it enables “password-less payments” by default. After your first transaction, you won’t have to enter your password anymore and will be able to use “one-click payments”. Tencent, the tech giant behind We Chat, and other investors funded more than 110 million USD in 2016.

Lastly, Pinduoduo also makes money from so-called merchandise sales, which are primarily fruits and other fresh produce sold via is Duo Duo Grocery platform (previously Pin Hao Huo). Another by-product of Pinduoduo’s ever-increasing relevance was heightened regulatory scrutiny. As part of China’s crackdown on the tech sector, which saw them blocking the IPO of Jack Ma’s Ant Group amongst others, the Shanghai Consumer Council issued a warning to the company. For instance, Alibaba and Pinduoduo had forced merchants on their platform into exclusivity clauses, which prohibited them from joining competing services. In April 2019, the United States added Pinduoduo to its notorious markets list, which flags platforms that are known to have a high share of fake products on it.

Each item has a minimum number of buyers required to complete the purchase. the only investment guide you’ll ever need If that number is not met within 24 hours, then the group buy is cancelled and those who have already committed money will be refunded. Productmint.com provides tailored content on all things business and tech. The site arose from my fascination with how modern-day businesses utilize technology and product-led thinking to become dominant players in their industry. Pinduoduo’s transaction fees are considerably lower compared to other platforms like JD.com and Taobao, which charge anywhere between 2 to 10 percent per sale.

• For instance, iPhones on its platform were often heavily discounted in order to attract tier one and two city customers.
• Many of these citizens lived in remote or rural areas where it had been previously uneconomical to ship products.
• In April 2018, Pinduoduo completed a new round of financing raising $3 billion at a valuation of nearly $15 billion.
• It utilizes the social networking to connect like-minded shoppers and various gamifications to draw so many users gradually addicted to the platform.

Blocked OUTSIDE OF CHINA?

As much as 65% of the Pinduoduo’s transactions are completed through its WeChat mini program. Pinduoduo makes it seamless that without having to download its app, users could directly share the items with do not even have to leave the WeChat app throughout their entire ordering process. Later in 2018, Pinduoduo has also started to incentivize users to go to the standalone Pinduoduo app, over 60% of active users have come from and rely on Pinduoduo’s WeChat mini program.

Marketing Strategy:

Pinduoduo uses WeChat’s online payment system in the form of “automatic WeChat payments”. Once you complete your purchase, it is automatically billed to your WeChat Pay account without the need for further validation. Taobao has since answered Pinduoduo’s team purchase service with the launch of a dedicated discount app called Tejia in 2018. The advertising platform also covers video ads, through browsing rather than searching. As the company shows in its financials, in certain cases it acquires merchandise from suppliers and sells directly to axitrader review consumers.

Pinhaohuo and work in the gaming space gave way for the beginnings of Pinduoduo. So, if you want to generate visibility for your Pinduoduo shop, platforms like WeChat, Weibo, or Douyin can help you achieve this goal. All products ordered by a certain group are deliverable separately to each member’s address. In terms of market share, PDD is the third-largest e-commerce player in China behind Alibaba and JD.com, according to a report released in July 2019 by eMarketer. Many also questioned the validity of entertaining features in Pinduoduo’s value proposition.

Founded in September 2015, Pinduoduo is the fourth startup of Colin Huang, an ex-Googler who once worked on early search algorithms for e-commerce. 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. Temu’s business model has allowed it to become popular among consumers, but has also drawn concerns over data privacy, forced labor, intellectual property, and the quality of its marketplace products. The company has been embroiled in legal disputes with Shein, a direct competitor. WeChat is the biggest social media platform in China with over 1 billion monthly users.

Go International

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. Just weeks after the protest, in July, Pinduoduo went public on the Nasdaq stock exchange at a valuation of $24 billion. In 2007, he started a consumer electronics site called Oukou, which he managed to exit three years later.

They can connect the app to their WeChat profile or give a mobile number for registration. If you want to access it, you can directly download the app files from the platform’s website. Although Pinduoduo recently launched a website for its e-commerce system, the fastest way to access it is through downloading its app. Because of recent issues about security, you can’t download it from Apple’s App Store or Google Play Store.

Your Social Commerce Partner in the Chinese Market!

Viral marketing is a more clever way to build the identity of all the lesser-known brands on its platform. Financially, the platform could even out part of discounts with less marketing budgets. Pinduoduo tends to focus on lesser-known brands which might seem like a prime opportunity to use the platform’s innovative social commerce-driven C2M model to promote your products and increase your sales. However, if you’re not a Chinese-based company, you could have a bit of trouble. Not because the platform freezes out foreign sellers, but because China has closed communication.

Business Requirements

Coupled with other incentives such as cash, coupon, lottery and free products, Pinduoduo manages to acquire users at a very low cost. Combined with the extra satisfaction of scoring a good deal with your friends as a team, Pinduoduo soon became a viral sensation in China. Where Groupon focused on local vendors of “want to have” goods and services like fancy dinners and massages, Pinduoduo offers deep discounts for bulk purchases of everyday “need to have” household items. In this way, Pinduoduo is more like a social sharing driven version of Costco or Dollar General. Pinduoduo makes money from online marketing services, transaction services, as well as merchandise sales. As previously stated, PDD smartly integrated the app with ways to form a buying team so consumers will be enticed to spend on bulk items.

It utilizes the social networking to connect like-minded shoppers and various gamifications to draw so many users gradually addicted to the platform. When Pingduoduo was starting out, there was a shift in the Chinese e-commerce landscape. Sekkei Digital Group is an agency of digital hustlers, marketers, developers, and brand builders working between France and China.

Platforms like Taobao and Tmall were quite complex to navigate while Pinduoduo, vis-a-vis its mobile-first strategy, was more straightforward. On top of that, users would also receive cash or free products if they were able to bring a certain number of new members alongside with them. On Pin Hao Huo, they would primarily sell fruits which they stored in their sole warehouse near Shanghai. In one of their first big planned campaigns, which was aided by an $8 million fundraise in May automated trading 2015, they would go on to advertise heavily discounted lychees on WeChat.

The Free Pass Card enables users to enjoy the group-buying discount without having to form a team. Users usually get one Free Pass Card after completing two purchases on Pinduoduo. Another video on the company’s website says that instead of using a search bar function, Pinduoduo gives its users a personalized feed of products. The company combines products the user may need, like toiletries, with other things they may want to buy. A Pinduoduo blog post says that sharing products with friends helps users customize recommendations.