PinDuoDuo: 0 to $24 billion in 3 years with social commerce

In China, the world’s largest e-commerce market is currently being disrupted by a new social shopping app called PinDuoDuo. Pinduoduo is revolutionising the traditionally solitary online shopping experience by successfully integrating social functions into the business model, which Pinduoduo calls the “team purchase” model. App users can unlock heavily discounted products by forming shopping teams through inviting their friends and family. Pinduoduo also provides other incentives such as red pockets for inviting contacts, coupons, lotteries and free products.

Gamification, a seamless social shopping experience and unbelievable discounts enabled through bulk-buying direct from manufacturers - made Pinduoduo a viral hit in China.

Pinduoduo saw explosive growth: founded in 2015 and within 2 years was challenging e-commerce heavyweights JD and Alibaba with a NASDAQ IPO market valuation of 24 billion.

In the last 12 months, Pinduoduo has sold almost $42 billion worth of goods amongst 7.5 billion orders. Pinduoduo has over 344 million active buyers, soaring above JD’s 302 million and in sight of Alibaba’s 552 million.

The below graph illustrates Pinduoduo’s monthly active users courtesy of WalktheChat:

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Pinduoduo in action Here’s a walkthrough illustrating how Pinduoduo works with translations:

So how exactly did Pinduoduo disrupt the highly competitive Chinese e-commerce market? Part of this innovation has been enabled through WeChat integration. WeChat is the ubiquitous messaging app in China with a monthly active user base exceeding 1 billion. Pinduoduo has harnessed social interactions on the WeChat feed, called WeChat moments, to facilitate group purchases. Users share their Pinduoduo product link with their WeChat friends, and if there isn’t enough interest, then the purchase won’t take place. In addition, shoppers can access Pinduoduo as a “mini-program” through WeChat or through a stand-alone app. This integration is frictionless, putting social interaction at the forefront of the online shopping experience.

Pinduoduo uses social sharing to enable consumers to become brand ambassadors - and rewards them well for it. The app leverages the large social graph of WeChat to bring consumers together socially to discover and participate in deals. It’s less about low prices - more so about the satisfaction of finding value. This desire for a good deal drives shoppers to share Pinduoduo product links to their WeChat groups and WeChat Moments to complete a group purchase. This strategy is why Pinduoduo spread like wildfire, exponentially growing user traffic and challenging e-commerce heavyweights. The social functions embedded in the business model simply wouldn’t have been possible a few years ago, and in doing so - Pinduoduo has innovatively brought to life the concept of social commerce.

Pinduoduo as a successful application of social commerce

Pinduoduo gives credence to the concept of social commerce, illustrating how powerful it can be. Social media and e-commerce has always seemed like a natural partnership, yet there have been few companies to successfully integrate the two. Mary Meeker’s 2018 Internet Trends report gives rise to the influence of social commerce, with social media playing a large role in product discovery and purchase for 18-34 year olds.

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The explosive success of Pinduoduo highlights the potential of social commerce. Online shopping becomes much more meaningful coupled with social interaction and the desire to discover good value. Pinduoduo’s capitalisation of social shopping has been the integral ingredient in its success.

As Pinduoduo illustrates, group deals and social discovery are powerful elements to social commerce. At Groupify, we combine these components in a different format. Instead of operating within a messenger app or separate stand-alone app like Pinduoduo, we equip e-commerce retailers with an integrated social layer that allows consumers to connect, discover and socialise all within their online shop. Groupify brings the conversation to your online store, making the online shopping experience impactful instead of a boring, solitary transaction. Pinduoduo is an example of what social shopping can be if we're bold enough to think differently and challenge the e-commerce status quo.