You do not have to be a great connoisseur of the Chinese market, although we trust that our readers already indeed are, to know which is the most active e-commerce platform in China. By this we mean the one with the largest number of active users.
Alibaba, right?
Well… no, that is not true. The platform that had 788 million active users in 2020 is called Pinduoduo!
What is Pinduoduo, what does it do, and how has it managed to topple Alibaba, with 779 million active users, from the top spot in China?
After having worked for several years at Microsoft and Google in the US, Colin Huang returned to China in 2015, to found Pinduoduo.
The business model is based on two premises. Firstly, offer low prices for a sector of the population with limited economic resources and secondly, use social networks intensively.
This is achieved, more or less, by merging the business model of Facebook with that of Groupon.
For example, let’s say that a user searches for any product, from paper towels to handbags, or sneakers to technological items such as iPhones on the Pinduoduo app.
When the user finds the product they want to buy, the app will show two prices: the normal price and a lower one that can be obtained by sharing the link of the selected article with friends or family in another instant messaging app like WeChat.
When the user then finds more people also interested in buying the selected product, everyone will benefit from a group discount, which amazingly can be up to 90%.
“Pinduoduo started with food produce, with the vision of offering consumers the “Costco + Disney” experience with more savings and more fun,” says Chen Lei, the company’s current president and CEO. He stated, “We have now become the largest agricultural platform in China, and we hope that Pinduoduo will one day become the largest store in the world.”