Pinduoduo is China’s second largest shopping app; the company has only been around for 5 years but is already following closely on the heels of Alibaba which dominates the Chinese market through apps like JD.com and Taobao. For me there are four aspects of Pinduoduo’s product and proposition which make it stand out: team purchase, mini games, daily check-ins, and price chopping.
Pinduoduo adds a new spin on ‘social commerce’ motivating customers to form teams around a desired product. Consumers from groups in order to receive discounts directly from supplier. Pinduoduo users can proactively create an audience for a product that they want to buy or join an existing team. This all happens on relevant social media platforms, mostly on WeChat which is China’s most popular messaging app. The network effect thus created around a product or brand, driven by the customer, naturally carries a great appeal for suppliers and Pinduoduo’s customer-to-merchant (‘C2M’) model.
Alternatively, customers can buy a product individually and pay a higher price for the product compared to when they’d joined a team. In the example below, the user can buy this infant formula as an individual shopper for ¥59 (about 8 USD), or they can for a team with other shoppers and get it for ¥35.5 (5 USD) instead.
From: Clark Boyd on Medium
Another social element of Pinduoduo’s app is the heavy focus on multi-player games. Take ‘Toto Orchard’ below as a good example.
The inclusion of games to kill time or play with others is not a groundbreaking concept. What I find interesting is the direct link with shopping and rewards. For example, see ‘Duo Duo Orchard’ below, which feels like Farmville except that players will receive real physical products as rewards
The game is simple: A user creates and nurtures a virtual fruit tree until it yields a real box of fruit, which would then be shipped to their address. The more they shop, the more water droplets they receive to grow their tree. Duo Duo Orchard now has more than 11 million daily active users.
Simple but effective. By clicking on the daily check-in icon, a user starts accumulating rewards. The rewards each time are small, but like all rewards they do add up 🙂 and I can see how checking-in can become a habit for Pinduoduo users.
Price Chopping to Zero
As long as you get a big enough team it’s even possible to get a specific product for free. If a user goes to the price chop section in the app, they can select products that they want to get for free, which will set of 24-hour timer. Within this timeframe, the user must then share the product link with as many friends as possible. The way it works is that each friend who clicks on the link, the person who started the chain will get a discount, with this user only getting the product for free if the price has been driven down to zero within 24 hours.
Main learning point: In this brief review I’ve deliberately not explored potential downside of their product and proposition, such as stimulating addictive behaviours or promoting counterfeit goods. Instead, I’ve mostly zoomed in the social aspects of Pinduoduo’s ecommerce model since some of these aspects haven’t permeated more ‘traditional’ ecommerce models yet in my view.
Related links for further learning: