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. 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 : Introduction video
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Pinduoduo in a couple of 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”
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).
This leads 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 just 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.
Here’s how to build your online reputation:
WeChat is the Chinese Facebook. A messenger APP which gets two main features for users such as:
- WeChat moment: system allowing people to share content (messages, pictures, videos) and personal feedback.
- Wechat groups: to communicate solutions about their problems and therefore recommending brands or products.
Not very efficient for direct advertisement but a super tool for community management and building engagement. Keep in mind that Pinduoduo users are sharing a lot of products through WeChat to get these famous group discounts… You definitely need it.
- Open an official account
- Create an e-brochures
- Community management
- Engage with your followers
- Use mini-programs
Douyin is the video King in China. Extremely famous among young and middle-aged generations, it’s the perfect app to create content and share it with a very large audience. Very intuitive, it’s an amazing app for KOL strategy.
Douyin is the Top entertainment mobile APP in China
It’s the Chinese Google. And they use it a LOT. Consider that Chinese people don’t trust corporate communication. Instead, they check information about brands or companies directly on Baidu. For them, buyers’ comments or reviews will be more reliable than anything you could say. And before buying your product, be sure they’ll control your reputation online and compare your brand with other brands offering similar products.
Here’s how to optimize your reputation on Baidu:
- Use Baidu Zhidao & Zhihu: a good way to deliver information.
- Create a page on Baidu Baike: it’s kind of the Chinese Wikipedia. And they trust it a lot here.
- Forums: it’s important to develop your online presence. The more people talk about you, the better.
- PR: if you’re a good quality brand, there should be articles about you. If not, it means you’re not worth it.
- Comments/reviews: Chinese people are always giving a comment or review about what they bought. And you’ll need plenty of positive comments to convince Chinese people that they could distribute or buy your product.
NB : SEO is Different from PPC. SEO is organic results SEA/PPC is paid traffic;
How to distribute your products through Pinduoduo?
As Pinduoduo is an online platform, you’ll need to determine how will ship your product to your future clients. And you can choose between two main models here:
- Cross Border system
It’s basically the importation of goods through sellers from foreign countries. And the good part of this model is that you can use bond-warehouse. Which will definitely lower your investment when starting your activity.
- Developing your company in China
Whether you plan to establish a new factory in China or simply open a commercial office to shorten delivery time and make your operations easier, you can develop a Wholly Owned Foreign Enterprise (W.O.F.E). Very effective and giving you 100% control of your operation in China, it also allows you to get your own warehouse in China.
By choosing this model, you’ll get a Chinese business license (allowing you to sell products on every Chinese e-commerce online platform) and all the required certifications.
Once you’ll know how you will operate, you can register to Pinduoduo:
- Login the website
- Start the registration process
- Choose a type of store
- Fill in the qualification information
- Fill in the store information
- Wait for the platform review
- Sign contract
- Start selling
How much does it cost?
You’ll just have to pay a deposit entrance fee from 10,000RMB to 50,000RMB according to your industry category. Deposit is mainly used to pay back unsatisfied clients. And if there is no problem with your products, you’ll get your deposit back.
Pinduoduo takes no commission at all on your product sales. However, there is a 0.6% service fee for the payment function supplier.
To resume, if you plan to sell products on Pinduoduo you’ll need:
- Build up strong visibility and e-reputation
- Establish an effective delivery system
- Register to the Chinese platform
If you have any questions on how to sell your products through Pinduoduo, please feel free to contact us.
We are the Chinese Gentlemen
- Professional in e-commerce online business in China
- Digital Marketing Expert
- pinduoduo explorer
We give free advice and free coffee.
Our solutions are always given with a smile.