If you want to sell on Pinduoduo, and search for an Agency / partner to open your store and start operation… you are at the right place.
Pinduoduo, the top 3 E-commerce online platform in China
Probably unknown in foreign countries, it’s the new leading Chinese APP for social e-commerce, but also the fastest-growing App in the history of the Chinese internet.
Pinduoduo : the video
Pinduoduo in couple words:
- Above 100 billion RMB per year of merchandise sold on the platform 2 years after its launch (while it took 10 years for JD.com to reach that point)
- Over 195 million monthly active users (in June 2018). Which represents 31% of Alibaba’s MAU’s
- Mostly female users, 70.1%, living in 3rd tier cities
- An average order of $6, against $30 on Taobao/Tmall and $60 on JD
Purchasing behavior on the App:
- Most users who made a purchase are between 25 to 40 years old (63.3%)
- Most of the active buyers are also women (67.8%)
- Students represent 19.1% non-purchasing users against 9.3% active buyers
Core features of the App:
- Group buying (allow discounted price)
- Free products if you convince enough new users to follow Pinduoduo official account
- Short terms coupons (2 hours) pushing people to faster their purchasing decision
- Ask friends to bargain. Yes, your friend can help you bargain for a cheaper price
- Red envelopes to reward users for inviting friends (viral marketing)
- Lotteries: pay a small fee (0.01RMB), invite friends and get a chance to win a product
- Customer service messages customizable that can be sent 48h after the user followed the account or interacted with it.
- Automatic payment
How to sell products through Pinduoduo?
Pinduoduo success is based on the current model used by e-commerce players: social e-commerce. A concept consisting to integrate e-commerce channels into social media platforms and vice versa, which is creating a sharing community into e-commerce platforms.
Pinduoduo got a C2B model that allows shipping products directly from the manufacturers and therefore eliminates layers of distributors. It doesn’t only reduce the price tag for buyers but it also raises the profit of manufacturers. A very effective approach for perishable goods such as agricultural and fresh products.
“The more you are, the better you’ll save money”
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A method that allowed to increase the application’s awareness among Chinese. Plus, they are doing an active promotion campaign and sponsoring many well-known reality shows followed by a large number of Chinese such as “Happy Camp” or “Where is Daddy going?”.
In terms of collaboration, Pinduoduo prefers not very well-known brands over famous brands to erase all the premium stuff coming along with branding. And the costs for advertising/marketing are also lowered through users sharing the products by themselves through social media (they send product information directly to their friends and groups having similar income and consumption habits).
Which lead us to a big challenge for foreign companies:
In a country where fake companies and counterfeits jeopardized the trust people have in a business relationship, how to build brand awareness and credibility when the platform business model focuses on low-cost products and big discounts?
As a foreign company, how to proceed?
As an outsider, you’ll still have to gain the trust of Chinese people. Offering discounts and low-prices doesn’t mean that everybody will buy your product. In fact, you’ll still have to convince them that your brand is worth it.
And as Pinduoduo’s business model is mainly focused on Chinese social media, you’ll have to develop your e-reputation. Being a famous brand is not only reserved for high-ended luxury brands. Remember that Chinese people are always connected. It’s now in their culture to check on brands before buying anything, but also to give a comment or review on the product after buying this one.
Whatever the price of your products, a lack of visibility and bad reputation can kill your chance of success in China.
China got a close communication system, meaning: no Google, no Facebook, no Instagram, and other Western platforms.
THE KEY OF SUCCESS IN CHINA …. IS
BRANDING IS EVERYTHING IN CHINA
Step 1: Make your company visible
- Make up a website in Chinese
Even if more and more people speak English, their mother tongue is still Chinese. Therefore, you have to adapt yourself to the local market and write down everything in Chinese, register your website on a Chinese domain name, and design it following local standards.
- Open a social media account
It corresponds to the Chinese Twitter. Very popular in China, if you intend to target a large audience and engage with your customers, Weibo is a must-do. Very interesting platform to develop KOL strategy as well.
Step 2: Develop your brand image in China.
Even if you get cheap products, nobody will buy from you or cooperate with you if don’t seems to be a reliable brand. A platform such as Pinduoduo, Tmall or JD.com receives thousands of demand a day of companies interested in distributing their products on their stores.
So, consider that you’ll face strong competition just to get access to these platforms.
To get their attention, you’ll have to show your sexy side and attract them. You’ll have to build a strong fan base in China, to be present everywhere on social media, to get articles talking about you…
If you want to play in the big leagues, you’ll have to pretend to be a big boy.