On September 9th, Pinduoduo's "Billion Dollar Reduction" plan once again implemented a heavyweight new policy.
According to the merchant notification released by Pinduoduo, the platform has waived the logistics transfer fees for orders placed in remote areas, which will be fully borne by the platform and have covered all merchants on the platform.
Prior to this, Pinduoduo had already launched multiple reduction and exemption measures, including refunds and exemptions for technical service fees, promotion service fees, and reductions in merchant store deposits. From a series of measures, it can be seen that the recent promises made by the management of Pinduoduo to provide "billions of support resources for new quality merchants" and "billions of fee reductions for high-quality merchants" are being implemented at a visible speed. The platform ecosystem governance and long-term sustainable and healthy development that the Pinduoduo team expects will also demonstrate its value through immediate benefits sharing and inclusive measures.
Firmly investing and continuously improving the service system will become an important means for Pinduoduo to deepen the implementation of its high-quality development strategy in the near future.
The prosperity of the platform ecosystem begins with providing excellent merchant services
Our platform is an interdependent community composed of merchants, users, and operation teams. Merchants are important partners for our common service account consumers. "During the previous earnings conference call, Zhao Jiazhen, Executive Director and Co CEO of Pinduoduo Group, clarified the key position of merchants in the high-quality development of the platform.
Even before Pinduoduo made such an announcement, internal preparations had already begun in advance.
According to public reports, since mid August, Pinduoduo will offer refundable technical service fees to merchants who register to participate in on-site resource slot activities. When merchants participate in most promotional activities on the platform, including billion yuan subsidies, flash sales, platform promotions, 9.9 yuan special sales, trendy prices, multiplayer groups, etc., any refund transaction will automatically refund a certain percentage of the basic technical service fee.
At the end of August, the refund discount was further upgraded and increased. In addition to refunding the technical service fee based on consumer refund orders, the first use, then pay technical service fee for participating merchants has been reduced to 0.6%.
In addition to reducing service costs, Pinduoduo has also upgraded its after-sales appeal system for merchants. There is no longer a limit on the number of times merchants can appeal, but a green channel has been opened and a dedicated after-sales service team has been established. Anyone who has questions about after-sales service can file an appeal to the platform.
For abnormal orders, malicious complaints, and negative consumer experience orders that merchants are concerned about, the platform will also provide targeted follow-up and handling. The most crucial thing is that after the merchant successfully appeals, the platform will compensate for the relevant orders to achieve satisfaction for both consumers and merchants. At present, some merchants have already experienced this service in advance, and it is expected to be promoted to all platform merchants soon.
Less than a month since the last round of merchant subsidy benefits was launched, Pinduoduo has recently issued another notice to reduce its burden, which is also the broader measure mentioned at the beginning of the article to lower the coverage of merchant guarantee funds.
On September 9, Pinduoduo issued a new heavy new policy. All the transfer orders in remote areas from now on need only be sent to the transfer warehouse, and the logistics transfer fees for the second delivery of the transfer warehouse to Xinjiang, Xizang, Gansu, Ningxia, Inner Mongolia and other remote areas should be borne by the platform. At present, this new relief measure has covered all the businesses on the platform.
It is not difficult to see that Pinduoduo's determination to change the platform ecosystem and support merchant operations is very firm, as it has expanded from specific activity refunds and fee reductions to include all merchants.
We grow together with high-quality business partners, providing high-quality products and services to platform consumers, and satisfied consumers can bring continuous power to the overall ecosystem. This is the key to our long-term healthy development, "Zhao Jiazhen said during the earnings conference call.
Pinduoduo has always received a lot of support and stood out in the fierce industry competition due to its "more affordable" and "better service" for consumers. The "user first" philosophy of Pinduoduo has never changed, but as Pinduoduo shifts from striving for high growth rates to thinking about long-term and stable operations, providing high-quality merchants with a good operating experience has become a key focus of future reforms.
Just as the current Pinduoduo team's series of merchant subsidy investments may seem like a more proactive and genuine way to "sprinkle money" on merchants, they are actually actively playing the role of a good service provider for merchants and users, ultimately enriching the platform's high-quality product supply, better shopping experience, and achieving higher quality development.
Why is Pinduoduo eager to "turn the wheel" at this moment?
According to the latest financial report data, Pinduoduo's business growth rate in domestic e-commerce platforms is still considerable.
In the second quarter of this year, Pinduoduo's total revenue was 97.0595 billion yuan, a year-on-year increase of 86%; The net profit attributable to common shareholders was 32.009 billion yuan, a year-on-year increase of 144%. With the support of the 618 promotion, Pinduoduo has delivered an excellent business "answer sheet" whether it is through the "billion yuan subsidy" campaign to bring high-end home appliances and daily necessities to consumers in third - and fourth tier cities, or through digital technology to improve supply chain efficiency and promote the growth of more agricultural product production areas and industrial belts.
But many practitioners in the e-commerce industry are aware that the current excitement is the structural growth brought about by fully exploring the demand of the sinking market.
As of December 2023, the number of internet users in China has reached 1.092 billion, of which 915 million are online shopping users, accounting for 83.8% of the total number of internet users. With such a high penetration rate of e-commerce, the number of new online shopping users in China can still reach around 70 million by 2023. And this new demand mainly comes from the vast third and fourth tier cities in China, where a large number of small town consumers purchase high-quality products with less offline distribution through e-commerce.
In fact, the number of new internet users in China in 2023 is only about 25 million. Although the absolute scale is not small, under the fierce competition of several domestic e-commerce giants, the dividend of new demand is often shared by everyone. Therefore, based on the existing pattern and demand, the challenge of finding one's own long-term operational strategy is presented to everyone.
The "problem-solving approach" proposed by Pinduoduo is to transform into high-quality development as soon as possible, through the joint promotion of three major strategies: "high-quality consumption", "high-quality supply", and "high-quality ecology".
In the field of promoting "high-quality consumption", Pinduoduo's consumer first service ideas such as "billions of subsidies" and "refunds only" have become objects of imitation and learning in the industry. Pinduoduo has accumulated its unique experience through long-term positive feedback on "high-quality supply" and provided important ideas for exploring high-quality development that benefits both supply and demand.
For example, Pinduoduo has established a "new farmer cultivation" model through the establishment of a new farmer return home system and Duoduo classrooms, jointly exploring the cultivation of "learning research business" agricultural composite talents.
Although young people returning home to start businesses are full of passion and local sentiment, it is difficult for many to balance agricultural technology and market operation awareness. Pinduoduo leverages its industry experience and consumer operation advantages, and collaborates with well-known agricultural universities in China to provide technical training courses, helping batches of "new farmers" grow good products, adapt to the e-commerce market, and achieve a closed loop of production and sales. Data shows that as early as 2021, Pinduoduo had already driven over 126000 new farmers, mainly post-95s, to return home and start businesses, as well as over 16 million agricultural producers to participate in the digital economy.
Seemingly without direct investment in business transformation, it has enabled batches of new farmers to enrich the supply of high-quality agricultural products on the platform, allowing consumers to access a wider range of affordable and high-quality agricultural products, achieving a positive supply and demand cycle in the field of agricultural assistance.
We will continue to strengthen ecological construction, bring more high-quality products to consumers, and help agricultural production areas and industrial belts become gold producing areas, benefiting more high-quality agricultural products, domestic products, and industrial belt merchants. Based on the successful experience of previous investment and attempts in the agricultural field, Zhao Jiazhen is more determined to pursue a high-quality development path through firm investment and stimulating supply and demand vitality in the future.
Although the management of Pinduoduo has made it clear that the next step will be to increase the construction of a "high-quality ecosystem" and has launched multiple subsidies in a decisive manner, it is facing significant internal and external pressures.
During the conference call, Chen Lei, Chairman and Co CEO of Pinduoduo Group, pointed out that "our empowerment and feedback to merchants can promote the formation of a positive ecological cycle on the platform in the long run. Even if profits may be affected in the short term, we will still firmly make patient investments
The management of Pinduoduo has seen that the current e-commerce industry is facing fierce competition and external environmental factors, which will inevitably bring fluctuations to the company's business development and slow down revenue growth. Therefore, Pinduoduo needs to patiently increase investment in directions that are conducive to the long-term healthy development of the platform.
With Pinduoduo increasing its investment and determination in agricultural assistance to more merchants and product categories, the platform ecosystem construction has entered an accelerated stage, and the company's high-quality development process continues to deepen. Although the cost expenditures will visibly increase, this self adjustment and reform move is not only an adjustment to the company's governance structure and distribution methods, but also helps to continuously unleash the platform's growth potential and inject new impetus into future development.