Where is Pinduoduo's agricultural ambition?
Pinduoduo is likely to be the most willing to change itself among Internet companies.
From 2019 to the present, Pinduoduo has successively used the 30 billion strategy to promote the vigorous transformation of the platform. By vigorously allocating resources, Pinduoduo can often build a favorable business environment in a short period of time.
In the field of agricultural research, Pinduoduo's willingness to change is particularly strong.
On August 29, Pinduoduo released its 2023 second quarter report. Coinciding with the results, there was also news of new personnel changes - Pinduoduo's board of directors appointed Ivonne Rietjens, head of the toxicology department at Wageningen University in the Netherlands, as an independent director.
Wageningen University in the Netherlands is the world's top agricultural science research institution, and the main research content of toxicology is to analyze the safety of chemicals in food and medicine to humans. Ms. Ivonne Rietjens has 25 years of scientific experience in the field of food safety, holding key positions in the French Academy of Agricultural Sciences, the European Food Safety Authority (EFSA), and the European Food Safety Union (SAFE).
On the surface, Pinduoduo invited a foreign aid that has nothing to do with the e-commerce business, but in fact, following the release of the 10 billion agricultural research strategy in 2021, Pinduoduo is further improving its strategic position in agriculture and quickly moving towards the dream of agricultural revitalization.
1. Consumption: How can agricultural products become the ballast stone of performance?
After the release of the second quarterly report, the attention of the entire market was focused on the financial performance of Pinduoduo.
In the second quarter of this year, Pinduoduo achieved revenue of 52.28 billion yuan, a year-on-year increase of 66% and a month-on-month increase of 38%; GAAP net income was RMB13,108 million, a year-on-year increase of 47%.
Although the e-commerce market showed a collective recovery trend during the same period, Pinduoduo's performance was still bright. The stock price performance reflects investors' recognition of this report card, and on August 30, Pinduoduo US stock price soared 15.43% in a single day.
Behind the surge in performance, Pinduoduo is emerging a number of new consumer trends, many of which are related to agricultural products.
For example, at present, in the Pinduoduo 10 billion subsidy column, the autumn supplement activity of quality agricultural goods is underway. The original price of 19 yuan and 2 jin of red heart pomelo was reduced to 9.6 yuan; A box of 3.6 to 4 kilograms of Qingdao prawns, the original price is 76.9 yuan, and the subsidized price is 56.8 yuan. The overall characteristics of these subsidized commodities are that they contain common agricultural products such as fruits, vegetables, meat, and eggs, and there are good subsidies, and the price of a considerable number of products after subsidies is close to five discounts.
Pinduoduo is good at using subsidies to the edge.
The topic of fruit assassins has been hot this summer, and consumers have collectively lamented that the prices of some high-end fruits have begun to become "incomprehensible", such as Japanese Shizuoka melon at Japanese restaurants for 138 yuan per slice. However, under the "Fruit Free Consumption Season" activity launched on July 5 by Pinduoduo's 10 billion yuan subsidy, consumers can buy the same honeydew melon for less than 4 yuan per catty.
At the same time, the fruits that receive key subsidies also include durian, lychee, coconut green, jackfruit, passion fruit, etc., most of which are commonly loved by consumers but have higher prices. Under the precise subsidies of the platform, these high-end fruits are returning to the ranks of affordable consumption.
Through targeted subsidies, a large number of consumers are accustomed to visiting Pinduoduo to sweep agricultural products from time to time. Behind it, Pinduoduo is keenly aware of the market potential of seasonal agricultural goods and popular agricultural products, and through normalized subsidies, Pinduoduo is taking the lead in the industry to cultivate the "high-quality and affordable" agricultural product consumption mentality.
Another achievement of continuing to deepen agriculture is that Pinduoduo is becoming an important channel for the upward movement of agricultural products.
In the second quarter of this year, the number of agriculture-related businesses settled in Pinduoduo's tens of billions of subsidies increased by 60% year-on-year. The reason is that on the one hand, the stable demand driven by targeted subsidies, and on the other hand, Pinduoduo continues to have a zero-commission policy for fresh food and agricultural products. For businesses dealing in agricultural products, Pinduoduo's platform advantages are more direct.
2. Supply: Create an upward ladder for agricultural products
To revitalize agriculture, it is not enough to simply stop at the consumer side to give subsidies.
Qianjiang City, Hubei Province is famous for its crayfish and is known as the "hometown of Chinese crayfish". The water network here is crisscrossed and the precipitation is abundant, which is naturally suitable for the growth of crayfish. As early as 2000, Qianjiang City raised crayfish in rice fields through the "shrimp and rice continuous cropping" model. Last year, the comprehensive output value of Qianjiang crayfish exceeded 66 billion yuan.
However, Qianjiang crayfish also have weaknesses, and the scattered shrimp enterprises lack strong brands and cannot make a name in the domestic market; Traditional shrimp enterprises rely on offline sales channels, start late in online layout, production lines, warehousing, and logistics are immature, and the scale is far behind Jiangsu Xuyi. During the epidemic, the offline sales of crayfish were blocked, and all Qianjiang shrimp companies began to realize the significance of online layout.
The cooperation with Pinduoduo has allowed Qianjiang crayfish to find new growth points. This year, Pinduoduo launched the "Nongyun Action" and went deep into the Qianjiang crayfish production area to bring digital growth to merchants. Liuwu, a traditional shrimp company specializing in ready-to-eat crayfish, entered the list of "10 billion subsidies" and "10,000 groups" in March this year, and achieved a 100% increase in sales the following month.
And what Pinduoduo brings to Qianjiang crayfish is the right solution. For crayfish head enterprises, Pinduoduo provides full assistance from brand, traffic to supply chain. For example, the transportation of live crayfish is extremely difficult, and it wilts when it leaves the water, so Pinduoduo will open a flash sale activity and provide express transportation support to ensure that the crayfish can be completed within 24 hours from the water to the consumer's receipt.
And this is just the tip of the iceberg of Pinduoduo's "Nongyun Action" in more than 100 agricultural production areas across the country. In Jinxiang, Shandong, which is rich in garlic, Pinduoduo connects scattered merchants with special logistics systems such as warehousing and cold chain, and provides them with one-on-one e-commerce operation training; In Yuncheng, Shanxi, which is rich in apples, Pinduoduo explained how to participate in platform activities and build regional brands for merchants from scratch.
Such a deep dive into the production area and the smell of rural dirt is hard work, but significant.
The biggest headache for domestic agricultural practitioners is often not price, but sales. Most seasonal agricultural products need to be sold in a short period of time, otherwise they will spoil, and the market sales in this small critical time window are crucial. Only relying on offline circulation, once the sales are not smooth, what is ruined is the development prospects of an industrial belt.
In order to build a mature regional agricultural product brand, it is necessary to steadily manage the whole process of breeding, planting, transportation and storage, sales and marketing, and create a reputation for agricultural products with a century-old strategic vision. New Zealand Kiwifruit can win a high reputation and high premium in the Chinese market, which is inseparable from the top-level design of the New Zealand Kiwifruit Marketing Bureau for decades.
Our agricultural belt needs to be integrated to meet the challenges presented by the market.
In addition, compared with the United States and other developed countries based on the distribution mode of direct sales of origin, the circulation of agricultural products in China is mainly based on wholesale channels, from the purchase of the origin to the wholesale of the place of origin, the wholesale of sales areas, and terminal retail, each circulation link is inseparable from the additional markup, and the longer circulation time also increases the risk of loss of agricultural products.
As a result, farmers and consumers alike struggle to benefit from this complex and cumbersome distribution process.
Pinduoduo's direct sales model of origin around online channels is a good medicine. Use funds to subsidize agricultural products to open up market demand, use the ability to increase the volume of orders in a short period of time to solve the shortcomings of agricultural products, and solve the most urgent talents and technology problems in the agricultural belt by going deep into the production area to build digital supply.
In the second quarter of this year, the sales of Pinduoduo's tens of billions of subsidized agricultural products increased by 80% year-on-year, among which tomatoes, cucumbers, pumpkins, mangoes, peaches, lychees and other key products increased significantly.
After solving the worries of sales, the industrial belt has the spare power to adjust production and fully devote itself to brand building and warehousing construction. For example, Linyu County, Yuncheng City, Shanxi Province, has built a county-level warehouse distribution center, and a large number of new farmers are also studying quality control and launching their own high-quality brands.
3. R&D: Go to a bigger stage
That alone is not enough.
Agricultural revitalization must be the transformation of the entire industrial chain, including downstream circulation efficiency, brand benefits, but also upstream production efficiency, research and development cultivation.
How can you breed new, higher-quality agricultural varieties? How to introduce digital technology into the field of agricultural production, replace human growth with machines, reduce production costs and improve efficiency?
This was originally the work of agricultural research institutions. However, for Pinduoduo, which seeks to deepen its agricultural cultivation, driving agricultural innovation is also a strategic task of the platform.
In June this year, four teams composed of dozens of young scholars from different disciplines entered the final stage of the third "Duoduo Agricultural Research Science and Technology Competition", and they were the winners of the 15 preliminary teams around the world. Their results were tested by a new variety of lettuce called Cui Tian, which not only had to control the energy consumption of planting, but also strive for better finished product yield, taste and nutritional value, and even competed with AI algorithms.
Such an agricultural research event is of great significance, and the planting model brought by it can be applied to the industry in a short time.
The runner-up team of the inaugural competition, Zhiduoberry, has reduced the cost of strawberry industry in Laowo Village, Nujiang Prefecture, Yunnan Province, by more than 30% and increased production by 30% with its own smart planting solution.
Pinduoduo's guiding ideology in the field of agricultural research is not to calculate commercial returns, but to hope that scientific research results will be combined with agricultural production as soon as possible.
In May this year, Pinduoduo donated 100 million yuan to China Agricultural University to support the university's basic research and core technology research. In July, the second "Pinduoduo Cup" Science and Technology Small Academy Competition was launched. In last year's competition, six teams from all over the country won the grand prize for citrus, honey pomelo and other projects. For Pinduoduo, more laboratory projects are going to the field, and the industrial belt is supported by more emerging technologies, which is what the platform is happy to see.
Looking back at Pinduoduo's move to invite the world's top agricultural experts to serve as independent directors, it is not difficult to understand.
Pinduoduo's agricultural dream is to create a number of high-quality, high-premium Chinese agricultural product brands. Just like the success of Chilean cherries and New Zealand kiwifruit in China. These emerging Chinese agricultural products must not only meet the consumption upgrading needs of the domestic market, but also go to the world and enter the markets of developed countries.
To build a world-class brand, it is inseparable from world-class authoritative technical guidance.
Professor Ivonne Rietjens, who specialises in agricultural technology and food safety, has insight into cutting-edge research trends around the world and extensive experience in the field of food safety in Europe. Partnering with such a veteran means that Pinduoduo is preparing itself for the next decade of Chinese agriculture.
This is also the reason why Pinduoduo can fully invest in the field of agricultural research regardless of commercial returns. When hundreds of globally competitive regional brands of agricultural products emerge in China, as an important channel for the online circulation of Chinese agricultural products, Pinduoduo will also ride the east wind and usher in the next growth dividend.
More importantly, this will be a consumer experience revolution, a revolution in the production efficiency of farmers, a revolution in the circulation of the agricultural industry chain, and all links in the industrial chain will cooperate for win-win results in the new situation. With such a beautiful prospect, there is no reason why Pinduoduo should not chase it.