How the corona pandemic is spurring the rise of Pinduoduo
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Within a very short time, Pinduoduo has developed into the second most successful e-commerce platform in China after Alibaba. With group purchases and interactive competitions, the marketplace app offers services that have long been neglected by other providers.
Pinduoduo has 585 million active buyers and 366 million active users, extrapolated to one year. Of these, 135 million are active every day. Last year, an average of 54 million consignments were processed every day.
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Originally it was only about selling fruit and vegetables
Pinduoduo was founded in 2015 under the name Pinhaohuo. The original business model was to buy fruit and vegetables from farmers and market them online directly to consumers. The newly founded company initially neither had its own website nor an app, but instead used Wechat groups to acquire customers.
The so-called team shopping is still the essential cornerstone for success: Consumers exchange information about certain products in a community, evaluate them and then shop together as a team to get discounts. Anyone who manages to gather a correspondingly large community behind them even has the option of certain products get it for free.
Buyers can either create a group themselves or join existing groups. This creates an incentive for customers to share products with their network, which in turn leads to higher sales volume for sellers and enables them to offer good value for money
In the past three years, Pinduoduo has increasingly developed into a marketplace for third-party providers. Fruit and vegetables now only play a minor role. The offer ranges from clothing and electronics to food of all kinds.
Mobile first approach and group buying make an impression on consumers
An essential pillar for the success of Pinduoduo is its consistent mobile-first approach: Just like with the Facebook newsfeed, users receive a constant stream of customized short messages. Consumers can thus obtain permanent information on details of new products and discounts. The feed-based approach is a clear differentiator from the search-based approach of other e-commerce platforms. Pinduoduo is in clear contrast to giants like Amazon or Alibaba, who above all emphasize their huge range and thus try to retain customers.
In cooperation with the internet giant Tencent, Pinduoduo developed various online games that keep users in the app and encourage interaction between customers and sellers. A popular game with the name Duoduo Orchard for example, prompts users to take care of a particular tree. In order to supply him with water and fertilizer, users often have to open the Pinduoduo app, buy goods, share offers and invite friends. As soon as the tree has “matured” virtually, the user receives a box with real fruits from “his” tree free of charge.
Without Wechat, Pinduoduo’s success would be unthinkable
The success of the interactive concept from Pinduoduo is closely linked to the possibilities that arise through the use of the social media platform Wechat. In Wechat groups, users share information about the products listed on Pinduoduo, make recommendations and look for people with similar purchase intentions. In this way, Wechat ensures that interest in the app continues to grow.
The corona pandemic and above all the lockdown have accelerated the expansion of Pinduoduo even further: Because social interaction, as was previously possible in the supermarket, has increasingly shifted to the digital due to the contact restrictions. In Germany, too, the pandemic opens up huge opportunities for apps like Pinduoduo.
