Pingduoduo, a new e-commerce platform, has existed for merely 4 years, had already overpassed the Alibaba in terms of the active users: at the end of 2020, Pingduduo had 788.4 million users, ahead of Alibaba’s 779 million.
Though the Shanghai-based company Pingduoduo had annual revenue of $9.1 billion, remaining a small part of Alibaba’s $72 billion in 2020, the former still represents a strong challenger for Alibaba and JD.com, the two major e-commerce platforms.
How does Pingduoduo succeed in the market?
By providing a combination of value-based shopping and entertainment, Pingduoduo has adopted a unique way of Chinese e-commerce model – social e-commerce. It has combined the shopping with social media, and has made the shopping experience as part of the fun experiences.
The strategies of built-in games, share deals, live-streaming videos, bulk sales for discount, and shopping vouchers earned on virtual games allow Pingduoduo to bring consumers altogether in one platform. The consumers may share the shopping experiences as friends or as strangers. This in return creates very high loyalty base of consumers.
How does Pingduoduo provide as e-commerce opportunity?
The online retail market in China represents as a very resilient market with high expansion rate: it is expected to grow from $354 billion in 2020 to $549 billion in 2025, according to the eMarketer research company.
The average Pingduoduo user spent $324 in 2020. The number of average purchase is increasing, but accounts for less than 25% than the Alibaba’s average user spend. The reason is due to the offerings of products on the platform and to the profiles of client base. Pingduoduo, a challenger in the e-commerce market, has more penetration in the tier 3-5 cities, where purchasing power is relatively lower than tier 1-2 cities. However, the purchase powers of these cities are increasing exponentially in the last few years.
How can international brand use Pingduoduo to accelerate e-commerce sales in China?
Pingduoduo has a relatively mature supply chain especially in food. The fresh foods segment accounts for 15% of the revenue, but other segments are increasing their share. The strong base of active users on Pingduoduo means great opportunities for international brands to tap into.
Rougelink, a leading cross-border agency offering e-commerce solutions in China, represents as a strategic partner of Pingduoduo. Contact us ROUGELINK to enquire how to tap into the vibrant Chinese e-commerce market.
Rougelink offers e-commerce solutions in China, with integrated capabilities encompassing all aspects of the e-commerce value chain covering e-store operations, digital marketing, customer services, and logistics.
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