On November 12, pinduoduo released its financial report for the third quarter of 2020, showing that its revenue in the third quarter exceeded 14.2 billion yuan, up 89% year on year. According to the Forbes rich list, Huang Zheng’s fortune soared by 8 billion US dollars, about 52.9 billion yuan, making him the fourth richest person in China, ranking 24th in the Forbes Global rich list.
Huang Zheng, the founder of pinduoduo, is a legend from founding pinduoduo to being the richest man after 1980s in China. So how does pinduoduo, known as a dark horse in China’s electricity business, do it? This makes many people curious. From its establishment to its listing, pinduoduo took 10 years for Jingdong, 8 years for vipshop, 5 years for Taobao, and only 2 years and 3 months for pinduoduo. Pinduoduo has achieved Jingdong’s achievements in 4 years and 10 years. Now pinduoduo has been listed. At the beginning of the year, pinduoduo even surpassed Jingdong for a time.
Along with the problem of pinduoduo, the unsolved mystery of all consumers is why pinduoduo is so cheap? Will businesses not lose money? Pinduoduo should be the lowest price among all e-commerce platforms at present, and it is “low” with no lower limit. No matter what the product is, as long as the business is settled in pinduoduo, the price will be much lower than other platforms.
For pinduoduo’s consumption model, we all know it well: spell single mode. However, pinduoduo pays 0.6% commission to the merchants, but tmall charges 2.5% commission. Pinduoduo’s customers are obviously concentrated in the third and fourth tier cities and township residents to grasp the customer psychology. “Small profits and quick sales” is the business model of pinduoduo’s whole platform. Pinduoduo’s social e-commerce model makes it largely dependent on the user ecology of wechat. Tencent is the largest institutional shareholder of pinduoduo, holding 18.5% of the shares. Most of its transactions are from wechat, which is the main means of building a “shopping team” on pinduoduo.
In recent years, with the rapid growth of China’s e-commerce market, the number of Internet users continues to grow. According to the statistics of the e-commerce trading platform of the National Bureau of statistics, in 2018, China’s e-commerce transaction volume reached 31.63 trillion yuan, an increase of 8.5% year-on-year. Among them, the trade volume of goods and services e-commerce was 30.61 trillion yuan, up 14.5% year on year.