Centralized platform for low price commodities: supply chain advantages and strategies of Pinduoduo

Tech 2023-07-08 15:25:06 Source: Network

Illustrated and Texted View of Literature and FinanceEditor | Guan Wencai TheoryThis text contains approximately 4103 wordsReading time is about 8 minutesprefacePinduoduo, as an Internet innovation enterprise with a centralized platform for low-cost goods, has risen rapidly in a short time and achieved great success in the market.Pinduoduo has a special way of business, called "Pinduoduoduo"

Illustrated and Texted View of Literature and Finance
Editor | Guan Wencai Theory

This text contains approximately 4103 words

Reading time is about 8 minutes

preface

Pinduoduo, as an Internet innovation enterprise with a centralized platform for low-cost goods, has risen rapidly in a short time and achieved great success in the market.

Pinduoduo has a special way of business, called "Pinduoduoduo". It combines social group buying and bargaining activities, attracting many people's attention and participation.

Pinduoduo realizes product dissemination and fission growth by leveraging the interaction between social networks and users.

The group buying mode encourages users to form group buying groups by inviting friends to achieve lower prices, so that Pinduoduo can provide more competitive prices.

With the success of Pinduoduo, the supply chain is like a huge cooperation system, which is responsible for the whole process from the production of goods to your hands.

For a platform like Pinduoduo, they need to work closely with suppliers to ensure that they can get a wide range of products with favorable prices.

Only in this way can Pinduoduo provide consumers with more affordable prices and attractive commodity choices.

Therefore, the smooth operation of the supply chain is critical to the successful operation of Pinduoduo. By optimizing the supply chain model, the cost of intermediate links can be reduced, the competitiveness of goods can be improved, and consumers can enjoy the benefits of lower prices.

Pinduoduo uses social group buying and bargaining to not only meet users' demand for low-cost goods, but also strengthen users' desire and fun to participate. By offering discounted prices and initiating bargaining activities, we can attract more users and develop into regular customers.

This mode of Pinduoduo makes it easier for us to understand the development of the centralized platform for low-cost goods, and will also provide reference and enlightenment for other e-commerce enterprises, promote the sustainable development of Internet innovation enterprises, and promote the further growth of the whole low-cost goods market.

Overview of Pinduoduo Cut One Blade Business Model

Social group buying is an important part of the Pinduoduo cut one knife model, which has a positive impact on the participation and activity of platform users.

Social group buying encourages users to invite friends or join existing group buying groups. Once the number of people meets the platform's requirements, they can purchase products at a low price.

This rule drives many users to share links and information with each other, enabling more users to participate in the activity. When people see the interaction and cooperation between other users, they are more impulsive to make purchases and actively participate in consumption activities.

Social group buying forms a social circle with similar interests, allowing users to experience the joy and satisfaction of group shopping.

In this group buying group, users can communicate with other group buyers, share their shopping experiences and feelings, and also provide product recommendations and opinions to each other.

This interactive communication makes everyone more willing to participate in group buying and also enables them to obtain more useful shopping information. This information exchange increases the connection and stickiness between users and the platform.

Social group buying involves buying the same product in groups and buying the desired product at a lower price.

Moreover, when the quality of these group buying products is good, they will receive praise and dissemination through the evaluation area, which will attract more and more users and enable them to enjoy affordable prices.

Word of mouth among Chingusai makes Pinduoduo gradually become one of the main shopping options in the relationship network, further expanding the number and activity of platform users.

Since its establishment in 2015, Pinduoduo has rapidly attracted a large number of users and achieved significant market development and user expansion.

Market performance

Rapid growth in user scale

Pinduoduo has attracted the attention of a large number of users with its low price commodities, social group buying, bargaining and other characteristics.

By the first quarter of 2021, the monthly active users of Pinduoduo had exceeded 600 million, an increase of 68% over the same period of the previous year. This shows Pinduoduo's ability to expand rapidly in China's e-commerce market.

Continuous growth in market value and revenue

After the listing of Pinduoduo, the company's market value quickly exceeded 10 billion dollars. And continuously achieved rapid growth in revenue. By the end of 2020, the company's total annual revenue had grown very fast, with a significant increase in revenue compared to last year. This indicates that the company has made significant development and progress in the past year.

The occupation of rural markets

Pinduoduo actively develops the rural market and has made remarkable achievements. The company has successfully attracted a large number of rural users through strategies such as subsidy incentives and precision marketing.

According to statistics, Pinduoduo has more and more users in rural areas. As of the latest quarter, the number of active users of Pinduoduo has increased a lot compared with last year, which shows that Pinduoduo has gained widespread attention and recognition in rural areas.

competitive edge

Low price product strategy

Pinduoduo takes low price commodities as its selling point, and greatly suppresses prices through innovative procurement and settlement methods.

They are good at making use of the psychology of some consumers who like to buy cheap and practical, so that the Pinduoduo platform can gain more users in the increasingly fierce market environment.

Layout of rural markets

Pinduoduo actively explored the rural market and successfully attracted a large number of rural users through huge subsidies and the construction of rural service sites.

The company has optimized and adapted to the rural market in logistics, payment, and other aspects, enabling rural areas to buy what they need without leaving their homes.

Big data and precision marketing

Pinduoduo attaches great importance to the use of data. They will understand our needs according to our preferences and behaviors, and provide targeted product recommendations and services to make our shopping experience more personalized and satisfactory.

With strong data analysis ability, Pinduoduo can better understand the needs and preferences of users. Pinduoduo recommends appropriate products to us based on the analysis of users.

In this way, we can more easily find what we like and increase the chances of successful purchases.

Analysis of supply chain advantages

competitive edge

Acquisition of low-priced sources of goods

Pinduoduo usually has a good cooperation relationship with suppliers. It can purchase goods directly from suppliers. Because of its direct contact, it can save some intermediate links, so it can obtain goods at a lower price.

This kind of low price supply can not only enable Pinduoduo to provide competitive prices, but also meet the needs of users for cost-effective goods.

Consolidate supply chain stability

Pinduoduo has established a good partnership by developing and growing together with suppliers and sharing risks.

This long-term partnership enables suppliers to have a deep understanding of market demand and plan production capacity and inventory in advance to ensure the adequacy and stability of the supply chain.

Advantages of quality control

Pinduoduo cooperates with low price suppliers to effectively control product quality through strict review and selection procedures. Only select suppliers that meet the quality standards of Pinduoduo to ensure the quality of products and the shopping experience of users.

This quality control not only improves the trust of consumers in Pinduoduo, but also establishes a good reputation for the company.

Innovative cooperation mode

Innovative cooperation mode

This cooperation mode can flexibly adjust product specifications and functions according to market demand and user feedback, and obtain more diversified and more consistent products from suppliers, which is conducive to Pinduoduo's competitiveness in this environment.

Data-driven decision-making

Pinduoduo can collect and integrate a large amount of user behavior data, transaction data and Market trend data from different channels, and judge the market development direction and marketing methods based on these data.

This enables the supply chain to adjust at any time in a fierce environment to prevent excessive inventory from causing waste and loss, and to meet the personalized and diverse needs of consumers.

Supply Chain Visualization and Collaboration

Pinduoduo can integrate information in different links and present it to managers in an intuitive way by establishing logistics information system and collaboration platform.

This can ensure that the data, processes, and issues related to the supply chain are clear at a glance, and potential problems can be identified and resolved in a timely manner, improving operational efficiency and management level.

Logistics Intelligence and Rapid Delivery

Pinduoduo has realized intelligent logistics and rapid distribution by introducing Internet of Things and artificial intelligence technology. By attaching electronic labels, sensors, and other devices to product packaging, real-time monitoring of package location, temperature and humidity information can be achieved.

During the process of goods arriving at their destination from the warehouse, plan and adjust the transportation path, as well as reasonably arrange the delivery plan of the goods. This can reduce transportation costs, save time, and enable faster and more convenient delivery of goods.

Discussion on Supply Chain Strategy

Pinduoduo has successfully achieved outstanding development results by reasonably positioning the market demand and consumer groups of low-cost goods. They use Big data to analyze and predict market demand, and deeply understand user behavior and purchase preference, so as to accurately capture and meet the demand of low-cost commodity market.

Through rich user data, analyze user preferences in various dimensions and adjust product strategies based on the analysis results to meet the needs of different consumer groups.

With the advantages of Big data and suppliers, they can select and provide low-cost goods to ensure a wide range of supply channels. They choose suitable suppliers and products, evaluate the reliability of suppliers and the quality of goods, and through negotiation and negotiation, purchase goods at more favorable prices to provide consumers with competitive low-priced goods.

These strategies have laid a solid foundation for Pinduoduo to successfully meet consumer demand, obtain a stable supply of goods and maintain the competitiveness of low-cost goods.

Pinduoduo has established a long-term and stable cooperative relationship with suppliers, and improved the stability and efficiency of the supply chain through mutual trust and joint efforts.

This long-term cooperation helps to establish close communication channels, enabling both parties to quickly cooperate and solve problems in the face of market fluctuations and supply chain issues.

Pinduoduo also pays attention to the collaborative management and communication among all links in the supply chain. They utilize logistics information systems and collaborative platforms to achieve real-time information sharing and collaboration within the supply chain.

This collaborative management can improve the efficiency of supply chain operations, reduce errors and delays in information transmission, and ensure efficient coordination between various links.

Big data has a very reliable advantage in analyzing the market and consumer interest. Pinduoduo can accurately predict the market trend through in-depth analysis of user behavior, purchase records and other data, and make corresponding supply chain adjustments based on these forecasts, such as adjusting the supply chain configuration and product strategy.

They also link the transportation industry with computer data to achieve rapid logistics delivery. By monitoring the location and conditions of goods in real time, Pinduoduo can optimize transportation routes and distribution plans, and improve logistics efficiency and service quality.

In addition, Pinduoduo has established a logistics information system, so that it can fully understand the operation of the supply chain, find and solve problems in time, and effectively improve operational efficiency and management level.

Summary

Pinduoduo has achieved great commercial success by virtue of the supply chain advantages and strategies of the "chop one knife" model. By building a stable supply chain system and cooperation mechanism, Pinduoduo can ensure the efficient operation and stable supply of the supply chain.

Pinduoduo's cut and cut mode maximizes the scale effect through group buying, attracts more consumers to participate, and increases suppliers' willingness to cooperate.

This further reduces the price of goods and increases the attractiveness of consumers to purchase. Pinduoduo can also provide a wide range of goods at a lower price to meet the needs of different consumer groups. This supply chain advantage effectively enhances the platform's competitiveness and promotes the company's rapid growth and profitability.

In the development of business models, it is necessary to further explore supply chain cooperation models and technological innovation, and pay attention to the needs of sustainable development and cross-border trade. This will help promote the development of the e-commerce industry and achieve more stable and sustainable supply chain management.

References

Shi Wen. Research on Pinduoduo Business Model Based on Value Creation [D]. Harbin University of Commerce, 2022. DOI: 10.27787/d.cnki.ghrbs.2022.000066
Zhuang Yu. Taobao or Pinduoduo [D]. Jiangxi Normal University, 2022. DOI: 10.27178/d.cnki.gjxsu.2022.000082
Zheng Huiwen. Research on value creation of Pinduoduo social e-commerce model [D]. Central South University of Forestry and Technology, 2022. DOI: 10.27662/d.cnki.gznlc.2022.000640
Jiang Yichen. Analysis of Pinduoduo's "Cutting a Knife" Activity from the Perspective of Game theory [J]. National Circulation Economy, 2023 (01): 4-7. DOI: 10.16834/j.cnki.issn1009-5292.2023.01.033
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Dong Qi. Problems and improvement measures in e-commerce marketing -- taking Pinduoduo as an example [J]. Economic Research Guide, 2022 (03): 77-79

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