As a company targeting low-tier cities, PDD is adept at handling fluctuating market conditions. It leverages the distinct consumer habits of Chinese consumerism where they’re eager to find package deals on small purchases like diapers and slippers but can readily splurge on luxury items like watches, jewelry, and cosmetics. Shoppers like Li—price conscious and far from China’s big cities—have made Pinduoduo China’s hottest ecommerce player. Its 366 million monthly active users trail only Alibaba, outranking better-known rivals such as JD.com. Last month, Pinduoduo reported that second-quarter revenue had more than doubled from a year earlier. Its $40 billion market value exceeds eBay’s and places it among China’s five most valuable internet companies.

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This demographic data clearly shows that Pinduoduo’s user base comes from rural areas with moderate to low cost of living. That addictive, playful element makes sense, given founder and CEO Zheng “Colin” Huang’s prior experience heading Xunmeng, a studio that made online-based role-playing games. Tencent is a powerful ally, as WeChat blocks links from rivals, including Alibaba.

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As of March 2021, Pinduoduo says it has trained more than 100,000 new farmers in how to operate e-commerce businesses and has committed to train 100,000 more in the coming years. Many of these trainees are digitally savvy youths who have returned to their hometowns to set up online businesses and help their rural communities sell produce. Pinduoduo removes the middle-man from the supply chain and provides an opportunity for farmers to interact directly with consumers, thus helping them get a better price for their produce. Due to its robust business model, Pinduoduo has managed to increase revenues from just over $2 billion in 2018 to $14.7 billion in 2021. Analysts tracking the stock expect the company will grow its sales to $22.5 billion in 2022.

The investment will see GOME’s product range, logistics and after-sales customer support integrated with PDD. 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. Almost everyone believes that Alibaba and JD.com have reached the ultimate limit of China’s e-commerce and leave no room for e-commerce startups. However, the rapid rise of Pinduoduo has shown that there will be new models in the e-commerce benefits and challenges of big data in healthcare market. “As our business grows, consumers and regulatory bodies are holding us accountable for ever-higher compliance requirements and also the merchants doing business with us,” he said.

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1. A slew of retailers have announced price cuts in recent weeks to entice people to spend money on things like new clothes and decorative items for the home.
2. As much as 65% of the Pinduoduo’s transactions are completed through its WeChat mini program.
3. The user even has the chance to receive a free product if enough friends register for the bargain.

Pinduoduo’s founder, Colin Huang (Huang Zheng) believes that most present-day Chinese consumers have used the Pinduoduo platform. It took a very short time for Pinduoduo to achieve the growth that has taken Alibaba and JD.com many years. But the extremely fast growth rate will always bring many problems at the same time, such as the problems of counterfeiting, logistics and services, and how eventually the unit price for each customer can be increased. The problems experienced by Alibaba and JD must also be solved by Pinduoduo.

As much as 65% of the Pinduoduo’s transactions are outsourcing software development company 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. As Pinduoduo gets into life as a public company, the firm is following the e-commerce giants in cleaning up the platform.

Hangzhou-based Alibaba has long dominated China’s online industry, but it has been facing stiff competition from rivals and increased regulatory scrutiny from Beijing. Since Pinduoduo represents a unique target market of mostly low-income households with lower levels What is m&a of education, there is still a huge growth potential for the platform to gain even more market share. PDD has over 5.1 million merchants on its system marketing their products.