From an ecological perspective, how to view Pinduoduo's financial report?

Last week, Pinduoduo released its 2023 second quarter report. From revenue to profit, the whole body exceeded expectations. The stock price also jumped 18.99% that night. From the perspective of goods, merchants, and platform ecology, how to see the current Pinduoduo?

Merchant ecology: From speed to quality, fully embrace high-quality merchants. Pinduoduo's quarterly report, as is customary, still does not publish GMV. Today, Pinduoduo on such a scale, whether it is merchants, goods, orders, has come to the time to change from high speed to high quality. Merchants, on the other hand, are one of the most critical.

The classification of merchants, the granularity needs to be finer. Traditional e-commerce, or China's e-commerce platforms, generally categorize the sellers on the platform by size. This classification looks normal, but when you think deeply, it is not so scientific. Why?

Small businesses, not necessarily small in value. Let's take agricultural products as an example, a category that has the highest proportion of small businesses compared to other industries. Each business corresponds to a farmer. But the value created by these farmers is not necessarily smaller than that of the big sellers on the platform. For example, selling peaches, green onions, ginger, products grown and sold by small and medium-sized merchants still have a greater advantage in the competition. For example, the product is home-grown, home-packaged, and shipped by itself. Under the premise of similar product quality, small businesses in the agricultural products industry have lower costs than large sellers.

From the definition of the platform, these huge small businesses cannot be classified as low-value businesses. There can be no equating at all. For the platform, the most important thing to classify the merchants of agricultural products is to "let high-quality merchants be seen by consumers". And Pinduoduo's strategy in the past few years has been like this. Therefore, on the surface, there are many merchants who criticize Pinduoduo, but there are also a considerable number of merchants who do business silently on Pinduoduo. Today, in addition to "let high-quality merchants be seen by consumers", what subdivisions should be made about the granularity of merchants?

Make the business and growth of good merchants better. In the journey of Pinduoduo from 0 to 1, the platform's understanding of e-commerce is "province" and "more", followed by "fast" and "good". The number of merchants and the number of SKUs are the most important for 0-1 Pinduoduo. But today, the rules formulated by Pinduoduo for merchants need to be more detailed and scientific. Making high-quality merchants grow better is an important part of the platform ecology. For example, Pinduoduo introduces some brand merchants, which is to expand high-quality merchants. This process will inevitably make some businesses uncomfortable. However, the construction of the merchant ecology and platform ecology cannot be stopped.

Make it harder for poor merchants to do business. It needs to be explained again that a bad business is not the same as a small business. The difference here, it is necessary to add a definition, refers to: counterfeit, fraudulent and dishonest businesses. These merchants. It is a cancer cell of the plateau. The meaning of existence disrupts the ecological and social business rules of the platform. What the platform has to do is to let these merchants minimize being seen by users.

Pinduoduo, on the other hand, has already begun in the business ecology: in 2023, Pinduoduo will launch tens of billions of yuan in assistance funds to support and help high-quality merchants, brands and small and medium-sized enterprises through resources such as traffic.

How to move towards high quality in commodity ecology?

The industrial belt is the foundation. The categories that started with Pinduoduo are agricultural products and white labels. The common logic behind this is: high-quality supply based on industrial belts. For example, Jinxiang garlic, Pujiang kiwifruit, Yangjiang kitchen knife, Panzhihua Kate Mang, etc. Fruits and agricultural products, we can understand them as "special white labels": less differentiation, only origin brands, no product brands. And Pinduoduo, the development of the past few years, with its own efforts, has made these industrial belts glow with new energy. This is the supply side. On the demand side, through the mode of Pinduoduo, "point-to-point" connection is realized. As a result, the scale of goods and sales leverage in these industrial belts has been expanded, and the scale has been greatly improved. Corresponding to the result, the price of the goods purchased by the user is reduced, and the benefits are greatly obtained. That is, Pinduoduo often says "how affordable".

Today's Pinduoduo is the most important source base for China's e-commerce industry. And the industrial belt, the contribution.

Digitalization, further scale. Many of the industrial belt commodities mentioned above have a certain scale in Pinduoduo. But in the face of the global shopping crowd, there is still great potential. For example, Sichuan Pujiang kiwifruit, a brand of origin, belongs to the "touch of the net", and there is still a large number of possibilities for breaking the circle in the future. Digitalization is the basis for breaking the circle of industrial belts and production brands. For example, through data, which places in the country sell well? What is the portrait of the buying crowd? Through the data of various dimensions, how to improve and know the product? These are all worthy of consideration and discussion by platform and industrial belt merchants.

The upgrade of goods is still inseparable from e-commerce platforms. Compared with overseas, China's e-commerce market is characterized by a large number of users and a large scale. The upgrade of goods, massive user purchases and evaluations, has certain guiding significance on the side. In the field of agriculture, Pinduoduo has previously mentioned the research of seeds and planting, which has important and positive significance for the upgrading of agricultural products. It is obviously unrealistic to rely on individual farmers to upgrade commodities and industrial belts at this level, with neither resources nor hard technology. In the past few years, Pinduoduo has successfully "distributed" agricultural goods to C-end users by relying on the strategy of zero commission for agricultural products. The future ecology of high-quality products is not "peaches are not worried about selling", but on the basis of existing sales, "peaches are more delicious".

How to see the significance of Pinduoduo's "10 billion ecology"?

"Efficiency and quality coexist". Since its establishment, Pinduoduo has been one of the most efficient e-commerce companies in the world. Not only is the company's human efficiency higher, but the number of merchants and the scale of GMV, this ratio is also much higher than that of similar platform e-commerce. Such high efficiency allows businesses and users to get a lot of benefits. The next ten years of Pinduoduo will inevitably be a comprehensive run through "how fast and how good it is". On the basis of existing efficiency, gradually achieve "good" and "fast". Well, it is the merchants and goods mentioned above, and the rules are the key to screening good merchants and good goods.

Let merchants with credit get more opportunities. This I have already stated above, with the rapid growth of platform scale and revenue, the corresponding merchants and ecological governance are also exponentially increasing. The division of merchants requires the introduction of more and more scientific dimensions and evaluation systems. Regardless of large, medium and small sellers, "credit" is a standard one. To put it in layman's terms, it is the score of the merchant. As a platform, it is necessary to distinguish between rewards and punishments: let the merchants who operate carefully and make really good products increase their scores and credit, so as to obtain more revenue and growth. Conversely, for merchants whose credit continues to decline, points will be reduced and exposure will be reduced.

When Pinduoduo went public, it wrote a letter to shareholders. It mentions the word "duty". For the platform ecology, what I want to say is: the duty to merchants who sell good goods and serve well is the greatest duty to users. The "10 billion ecology" launched by Pinduoduo is currently on the right path.