"The World's Largest Social Commerce Platform": A Conversation with Pinduoduo

Pinduoduo is one of China’s e-commerce giants. In the space of just five years, it has joined Alibaba and JD.com at the top table. 

It offers a different take on ‘social commerce’ and brings some elements to online shopping that are missing on other e-commerce platforms.

As such, it’s an apt time to take a closer look at what sets them apart. 

But, you don’t need to hear me guessing what it’s all about. 

Instead, I had a great chat with Ada Yang about Pinduoduo (or, PDD), what makes them unique, and what the future holds.

Hello! First, can you tell us a bit about your role at Pinduoduo?

I am from Pinduoduo’s international corporate affairs department and lead PDD’s social communications with industry thought leaders, experts, academia and influencers in the international technology community, aiming to help the international community better understand Pinduoduo.

Many of our readers will have heard of the site, but can you give a quick summary of what Pinduoduo is and how it works?

We are one of the world’s fastest growing technology companies and the largest social commerce platform. We crossed the RMB 1 trillion (just over US$140 billion) in Gross Merchandise Volume mark last year and serve more than 600 million users, less than five years since our founding in 2015.

“Unlike legacy e-commerce platforms with their search-based models, Pinduoduo’s user experience is anchored around a recommendation feed.”

Pinduoduo in Chinese stands for “Together, More and More”. 

“Together”, because every product on our platform purchased as part of a team will have a significantly lower price than if the purchase was made by an individual.

The “More and More” is short for “More Savings, More Fun.” 

“More Savings” because we offer value-for-money goods on our platform.

“More Fun” because users enjoy an interactive and enjoyable experience shopping on our app through the integration of games and social interaction.

Unlike legacy e-commerce platforms with their search-based models, Pinduoduo’s user experience is anchored around a recommendation feed. So it’s very casual and well-suited for discovery, kind of like when you’re browsing your Instagram feed.

Are you noticing any significant shifts in consumer behavior in China?

Covid-19 accelerated the adoption of e-commerce and also highlighted the need for human interaction and social connection during the lockdowns.

“Livestreaming ecommerce, for example, is increasingly becoming a preferred way to shop in China precisely because it is more interactive and social.”

The most significant shift in consumer behavior we see in China is the move away from the “search, pay and leave” model of legacy e-commerce platforms to a social commerce model such as Pinduoduo’s, which more closely mimics the offline shopping experience by integrating the serendipitous joy in finding great buys and the social interaction that shopping together brings. 

Livestreaming ecommerce, for example, is increasingly becoming a preferred way to shop in China precisely because it is more interactive and social. We found that with livestreaming, consumers were more willing to purchase categories that traditionally did less well on e-commerce platforms. That is because being able to see and interact with the seller through livestreaming built trust and confidence in the products.

When people can’t connect in the physical world, they find ways to connect in the digital world.

Is Pinduoduo only available in China? Are there plans to launch worldwide?

Yes, it currently is only available in China. We are open to new geographies and exploring overseas opportunities. We will be where users need us to be.

In a recent Y Combinator article on Pinduoduo, they said, “Social commerce does not just mean connecting user accounts to Facebook, it means creating new shopping experiences for buyers and sellers online.” 

What does Pinduoduo bring to this growing area of ‘social commerce’?

Pinduoduo is a pioneer of interactive e-commerce or social commerce, where the user experience is designed to more closely mimic how people interact, exchange feedback and recommendations when they shop in real life.

“This deliberate, intent-based process … is increasingly not how most people prefer to shop, either online or offline.”

Imagine that you go to a shopping mall and spot a nice pair of shoes when passing by the shop window.

Your friends and family give you their opinion and the sales assistants recommend products based on your profile. PDD integrates these social aspects of offline shopping — the interactivity of the process, between friends, between shopper and sales assistant — into the online user experience. 

Legacy e-commerce on the other hand is built on a conventional search-based, transactional model. Consumers would shop with a clear idea of what to buy, type in the keyword, make the selection and pay for the purchase. This deliberate, intent-based process, while an efficient way for the e-commerce platform to log a sale, is increasingly not how most people prefer to shop, either online or offline.

The Pinduoduo model has been described as consumer-to-manufacturer, or C2M. Does Pinduoduo work directly with manufacturers?

China is known to be the factory of the world.

However, we believe that there are still inefficiencies in the supply chain where we can further optimize. Pinduoduo has been a pioneer of the C2M (Consumer to Manufacturer) model, where consumer demand and preferences are aggregated through e-commerce to help manufacturers customize their product design prior to the manufacturing stage to suit different demographics and customer segments.

This consumer-led manufacturing model shortens the supply chain by bypassing the middlemen, directing consumer feedback to manufacturers in a real-time, data-driven manner.

We help the manufacturers identify their targeted market and consumers with the consumer preferences we aggregate on our platform. We tell them what they could sell and the right price point. By producing what consumers want, how they want it and when they want it, manufacturers are able to cut costs by reducing mismatches in demand, and better plan their inventory and logistics.

How has the pandemic affected Pinduoduo’s plans?

Like most businesses in China and indeed the world, Pinduoduo faced a challenging time during the peak of the Covid-19 outbreak earlier this year. It was also when we were reminded by how much people rely on us to meet their essential needs under trying circumstances.

During this time, we stepped up our efforts to help the entire ecosystem of users, merchants and our business partners to ensure that the daily needs of our users were met in a timely and safe manner. Since May, we have seen daily average orders of 65 million, up from an average of 50 million in mid-March.

Which products are most popular on the platform?

Apparel, household goods, agricultural products are the most popular items.

How do you think the same model will be received in international markets? For example, are there cultural or economic factors that make your approach more/less suited to particular environments?

There are some aspects of China’s e-commerce industry that differ from the rest of the world, which has allowed the Pinduoduo model to grow and thrive within such a short period of time.  

First, China has close to 900 million mobile device users, which creates an essential foundation for the proliferation of mobile e-commerce. 

Second, unlike in the West, most Chinese consumers don’t have credit cards and instead use mobile payment apps like WeChat Pay and AliPay. 

Third, China’s logistics infrastructure has developed over the last decade with the rise of e-commerce and are widely accessible, cheap and fast.  

Fourth, China’s role as the “factory of the world” also provides the e-commerce industry with a wide selection of value-for-money products to meet and stimulate consumer demand. 

That said, we believe that wanting more value for money and fun while shopping is universal. Everyone wants to have more savings, more fun, together!

What does the future hold for Pinduoduo?

We will continue to bring more fun and interactive features to better engage everyone in our ecosystem including users, merchants, farmers, etc. to bring joy and value for everyone.