Pinduoduo demonstrates strong growth at 6.18 campaign
June 20, 2019
Consumers from first and second-tier cities accounted for 70 percent of agricultural product sales
At 00:05 on June 19, the counts were in at Pinduoduo’s Headquarters in Shanghai. It is clear that consumers from first and second-tier cities were looking for different bargains from those in rural areas.
Nearly 70 percent of orders for agricultural products from Pinduoduo’s 6.18 campaign came from first and second-tier cities. Over 300,000 latest iPhones were sold on Pinduoduo, and over half of these orders came from third-tier and below cities. Nearly 70 percent of orders of physical goods from Pinduoduo’s 6.18 campaign came from third-tier and below cities. Chery eQ1, a small Chinese vehicle priced at RMB 65,800, received over 700 deposits of RMB 999 in less than 8 hours.
△Pinduoduo users paid over RMB700,000 in deposits to order their Chery eQ1 in less than eight hours on June 18.
Similar to the annual November 11 shopping festival, dubbed "Single’s Day Sales", 6.18 is the second largest e-commerce sales campaign in China, held every June. Pinduoduo participated in the 6.18 campaign for the first time this year, running June 1 through June 18.
During the 18-day campaign, over 1.1 billion orders were made on Pinduoduo with brands and merchants beginning preparation for the mega sale in May in order to effectively attract Pinduoduo’s 443 million consumers. And this preparation paid off. Chinese home appliance brands, Supor, Joyoung, Midea, saw their sales on Pinduoduo increased by 450 percent compared with the same period last year. Pinduoduo’s consumer-to-manufacturer (C2M) model helped more local brands to connect to consumers across the country and over 9 million tailored products for Pinduoduo’s consumers were sold with Galanz and Jiaweishi, prominent home appliance brands in China, amongst the participating brands.
"Consumers from first and second-tier cities are keen supporters for fresh, high-quality and value for money agricultural products. We see more electronic products going to the rural areas, while agricultural products are flooding into the cities through Pinduoduo,” said Tao Wang, Chief Big Data Analyst of Pinduoduo. "The cycle is very much like a give-back from the cities to rural farmers who supported urbanization in the old days."
To incentivize consumers, Pinduoduo launched a joint "RMB 10 billion” initiative with brands and merchants and gave out coupons and subsidies. Popular items, including Dyson hairdryers, Apple Airpods, and Bose headphones, were at least 10 to 20 percent cheaper during the 6.18 campaign, and the success is clear: over 300,000 of the latest iPhone model were sold on Pinduoduo, amounting to over RMB 2 billion (US$ 289 million) in sales.
"The sales of 3C products (computer, communication and consumer electronics) has surged in lower-tier cities since Pinduoduo launched its joint "RMB 10 Billion" initiative. It is the first time that sales for 3C products in lower-tier cities has overtaken that of first and second-tier cities,” said Wang. "Other popular brands include Chinese smartphones such as Huawei, Oppo, Xiaomi and Vivo."
Meanwhile consumers from first and second-tier cities also participated on Pinduoduo during the 6.18 campaign. They purchased over RMB 7.8 billion worth of agricultural products between June 1 and 14 with over 70 percent of orders for agricultural products coming from first and second-tier cities.
Pinduoduo is fully committed to providing the best value to consumers. Rather than leave the work to consumers to compare prices across multiple e-commerce platforms, Pinduoduo introduced a “Hassle-free Price Check” program with over 300 staff monitoring prices in real-time across all e-commerce platforms. If a lower price was found on another site, these staff would adjust the pricing on Pinduoduo accordingly to ensure the prices were the lowest in the market.
In addition to location, Pinduoduo also saw interesting trends in the age of consumers. During the 6.18 campaign, nearly 80 percent of sales came from consumers born in the 1980s and 1990s. This reinforces what the company has already seen, that Pinduoduo’s team-purchase model is popular among younger consumers.
The competition among e-commerce platforms is particularly intense this year, as Pinduoduo is attracting more consumers who are looking for quality and value for money products on the platform. Some brands, both domestic and international, are reportedly being coerced to close their flagship stores on Pinduoduo since April to receive more traffic and incentives from other e-commerce platforms.
"Despite the pressure of unfair competition, Pinduoduo had an extremely successful 6.18 campaign," Victor Tseng, Vice President of International Corporate Affairs, said. "Merchants and brands want the choice to leverage multiple e-commerce platforms to sell their products to consumers. Pinduoduo has over 443 million active users and 'forced exclusivity' has taken away their right to reach these merchants and consumers. Such unfair and coerced exclusive arrangements ultimately hurt merchants, brands and consumers. It should be put to an end."