Pinduoduo: Driving e-commerce in rural China to improve farmers’ livelihoods

• Main Authors: LIANG, Hao, CHEAH, Sin Mei
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: Social responsibility; Shared value; Community development; E-Commerce; Innovation; Technology; Technology and Innovation
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/332; https://smu.sharepoint.com/sites/admin/CMP/cases/SMU-20-BATCH%20%5BPDF-Pic%5D/SMU-20-0043%20%5BPinduoduo%5D/SMU-20-0043%20%5BPinduoduo%5D.pdf
• Institution: Singapore Management University

Set in the midst of the Covid-19 pandemic in May 2020, the case illustrates Pinduoduo’s agile response to the crisis and its corporate social initiatives on rural revitalisation in China. Established in 2015 in Shanghai, Pinduoduo’s meteoric rise to become the third-largest shopping platform in China (after Alibaba and JD) was fuelled by its unprecedented growth within the first three years of its founding. Valued at an estimated US$63 billion in May 2020, the Nasdaq-listed tech giant was not only adept at pivoting its business model during its early days, but had also pursued an innovative concept of team purchase, coupled with social sharing, viral marketing, and gamification as its growth and user engagement strategies. A key part of Pinduoduo’s initial user acquisition was targeting the untapped rural market of nearly 600 million people in China. In giving back to society, it aimed to create meaningful impact on farmers’ livelihoods. The firm’s “Internet + Agriculture” model enabled growers to bypass unnecessary intermediaries to reach the consumers’ markets more quickly and profitably. Poverty-stricken farmers who participated in the Duo Duo Farm programme had the opportunity to attend entrepreneurship training, and obtain subsidies, resources and advice. Through these collective social initiatives, farmers could benefit from improved productivity, higher quality products and most importantly, increased incomes. During the Covid-19 outbreak, Pinduoduo stepped in to support farmers’ sales of agricultural produce on its livestreaming channels as well as the spring planting season. As the country gradually emerged from the crisis, how could Pinduoduo strike a balance between its sustainability efforts and the pursuit of its core business as an e-commerce platform? Students will be able to identify the causes of the rapid growth of the rural e-commerce market in China, and analyse the unique model that Pinduoduo adopts to become the third-largest player. Through the lens of Pinduoduo’s model, students will differentiate between different types of innovations and analyse how it can promote inclusive growth. This will further aid their comprehension in the connection and tensions between business profitability and social inclusion.