Pinduoduo is a fast growing e-commerce app in China that has reached 195 million monthly active users only 2 years after launching. It targets users predominantly in smaller Chinese cities who are typically female and over 40 years old. Pinduoduo encourages viral and social features like group buying discounts and incentives users to share promotions and bargains with friends. This has helped fuel rapid growth as the platform capitalizes on a large untapped market in lower-tier cities.

1. PINDUODUO
a Close Look at the Fastest Growing
E-commerce App in China
1. How fast is Pinduoduo growing?
2. User Demographics
3. Benchmark with other Platforms
Source: WalkTheChat
Brought to you by:
Truong Bomi
Cofounder/ CEO

3. Highlights
Pinduoduo went above 100 billion RMB per year of merchandise sold on the platform 2 years after
its launch… it took 10 years for JD.com to get there
Monthly Active Users (MAU’s) reached 195 million in June 2018: that’s 31% of Alibaba’s MAU’s
Pinduoduo users are predominantly female, living in Tier 3+ cities
The average order on Pinduoduo is 6 USD, against 30 USD on Taobao/Tmall and 60 USD on JD.com

4. PDD Growth
PDD Growth User Demographics Benchmark w/ other Platform

11. User Demographics
PDD Growth User Demographics Benchmark w/ other Platform

17. Purchasing behavior

24. BENCHMARK with other platforms
PDD Growth User Demographics Benchmark w/ other Platform

36. Pinduoduo features
There are two words that come to mind when thinking of Pinduoduo: addictive and viral.
The App is doing everything to push you to share the App with your friends. And once you
did, it does a great job at keeping them hooked. The App combines a bunch of tactics in
order to achieve these results.

37. Group Buying

38. Free Products

39. Sure enough, my awesome WeChat friends helped out and installed the App, and on the next day…
This can sound like a crazy strategy, but it’s not. The package sells for 99 RMB full price, 79 RMB in group buying. But Three
Squirrels makes a heavy margin on this, and most likely only charges Pinduoduo around 20-30 RMB to ship the free product.
That’s 3 RMB per high-quality App installs, linked with a WeChat social account. The promotion also leads one person to actually
get a delivery, engage with products and share about the experience with friends. This is exactly the kind of strategy that
propelled Pinduoduo on the top of the App stores.
Moreover, people might keep scanning the QR code after the free product has been claimed. In my case, 25 friends scanned the
QR code trying to help me get the free product: that’s a cost of less than 1 RMB per follower for Pinduoduo!

40. Short-term Coupons

41. Ask Friends to “Bargain”

42. Red envelopes + Leaderboard

43. Lotteries

44. Customer service messages

45. Automatic payment

46. A brief history of Pinduoduo
January 2014: Pinduoduo was founded by Huang Zheng (黄峥), a former Google employee
September 2015: Pinduoduo receives A round investment from an impressive list of investors,
including the former Taobao CEO Sun Tongyu
September 2016: B round of funding of 110 million USD, including Tencent and IDG as investors
December 2017: Cheetah mobile ranks Pinduoduo as #2 e-commerce App

47. One might wonder what caused such an explosive growth. Besides all of the tricks we mentioned
above, Pinduoduo has one specificity: it is doing exceptionally well in smaller cities (Tier 3 and
smaller).

48. Customer Persona | Small-city FEMALE at 40
Moreover, the majority of the Pinduoduo users are female above 40
years old in smaller Chinese cities. These users are extremely price-
sensitive, but they make frequent purchase and they are often in
control of purchasing for the whole family. These users might not have
much experience with e-commerce purchase, but once they learn how
(and bring all their friends into the platform) they can bring long term
profits to the Pinduoduo: they have high purchasing power, and are
continuously using the App.

49. Conclusion
E-commerce is hyper-competitive, especially so in China. It is important for new players to stand out with unique offerings that attract
customers, and Pinduoduo is one such success case, crafting a convergence between social and commerce that discovers and
capitalizes on a new source of users in lower-tiered cities.
As internet access in China’s rural areas continues to improve, it is likely the bargain-hunting app will sustain growth as its services
reach remote areas. It is highly visible in a lower-end demographic area, carving out a niche for itself that thrives with a high-volume
trade.
Pinduoduo has experienced a meteoric rise to the top of the Chinese e-commerce landscape over the last 2 years. At the core of its
success was a strong emphasis on social commerce, viral marketing & retaining users.
Although this trajectory is very unique, a lot of brands and platforms can take cues from Pinduoduo’s success. By applying some of
these tactics to your own business, you too can have more users with stronger levels of engagement.

50. Brought to you by:
Truong Bomi
Cofounder/ CEO