In China, e-commerce powerhouses such as Alibaba and JD are seemingly untouchable. Still, social e-commerce platform Pinduoduo managed to find a growing niche in the market in a relatively short time span of three years. The Shanghai-based company filed for a massive $1.6 billion IPO on the US stock market this summer, underlining its potential, both inside and outside China.
Technode.com/ChinaEconomicReview tries to find the secret to the newcomer’s success and this is it: Pinduoduo is solving the right problems for the right group of customers. Pinduoduo offers numerous products, ranging from daily groceries to home appliances. The alternative approach lies in its integration of social components into the traditional online shopping process, which the company describes as the ‘team purchase’ model.
By sharing Pinduoduo’s product information on social networks such as WeChat and QQ, users can invite their contacts to form a shopping team. The sole purpose of this seems to be to get a lower price for the commodity, but there is more. The team approach makes Pinduoduo extremely popular among China’s e-commerce consumers. Scoring a great deal with your friends as a team gives extra satisfaction. No wonder Pinduoduo soon went viral in China.
There is more, says the report. “Extremely low prices are another compelling attraction of Pinduoduo. The discount is usually up to 90%.” “The bestsellers are daily groceries at unbelievable low prices.”
Further reading on chinaeconomicreview.com