Lin Xin, a "veteran" who has been operating herbal tea e-commerce in Bozhou for many years, has long been plagued by high logistics costs. Especially when shipping to remote areas such as Xinjiang and Inner Mongolia, the shipping fee of up to 18 yuan per kilogram makes the free shipping service an unbearable burden for small and medium-sized businesses like her, which seriously restricts the expansion of business. There are not a few merchants like Lin Xin. However, with the introduction of Pinduoduo's new policy of "10 billion reductions", a turning point has quietly come.
Recently, Pinduoduo announced that it will fully bear the logistics transit costs in remote areas, which not only directly reduces the cost pressure of small and medium-sized businesses, including Lin Xin, but also makes the "free shipping" service possible, greatly broadening their market boundaries and improving the shopping experience of consumers. At the same time, Pinduoduo has also lowered the deposit of merchant stores, from 1,000 yuan to 500 yuan, and new individual and corporate stores can enjoy this discount, which further stimulates the vitality of the market.
Behind the package of reduction and exemption policies, in an increasingly competitive market, e-commerce platforms realize that only by cultivating and supporting small and medium-sized businesses, attracting and retaining high-quality merchants, can they fundamentally enhance the competitiveness and attractiveness of the platform. It is understood that in the next year, Pinduoduo plans to invest tens of billions of resources to support new quality merchants, strengthen the ecological governance of merchants, and promote the long-term healthy development of the platform.
In the eyes of the industry, Pinduoduo has achieved self-innovation through the strategy of "support and governance", marking that the platform has entered an upward spiral track. By continuously optimizing merchant services and strengthening ecological construction, we will accelerate the transformation to high-quality development, and also provide a new development model for the e-commerce industry.
The "10 billion reduction" plan reshapes the new ecology of e-commerce
On September 9, Pinduoduo made another effort to announce the official implementation of a new round of policies under the "10 billion reduction" plan. According to the notice issued by Pinduoduo, the platform has fully exempted merchants from logistics transfer fees for orders in remote areas, and these costs will be borne by the platform, which has covered all merchants on the platform. Prior to this, Pinduoduo has intensively launched a series of reduction and exemption measures, including the refund of technical service fees and promotion service fees, and the reduction of merchant store deposits.
It is reported that at present, the adjustment of the merchant's store margin is being tested intensively, and the merchants who take the lead in enjoying the policy cover nearly 70 categories, and some merchants have completed the withdrawal, benefiting millions of merchants, especially those who operate in multiple stores, and the operating costs are further reduced.
▲At present, Pinduoduo's "10 billion reduction" plan has implemented a series of measures.
Lin Xin noticed that since August 27, her store background has received the promotion fee refunded by the platform, which is distributed in the form of red envelopes, with an average daily red envelope amount of more than 1,000 yuan, and it is expected to save nearly 400,000 yuan in promotion costs throughout the year. Lin Xin said that the funds are planned to be used to promote mid-to-high-end nourishing health products. "In the early days of the business, we mainly sold herbal teas and tonic products for more than 10 yuan, and then we will develop a series of high-end nourishing health products of more than 30 yuan to enrich the product line."
At the same time, the implementation of the new policy also made her feel the convenience of logistics. When the express delivery is sent to remote areas such as Xinjiang, the unit price of the express delivery can be reduced to 2 yuan/kg by simply sending the goods to the Xi'an transit warehouse, and then all the logistics costs will be borne by Pinduoduo. As a result, the cost per order is significantly reduced, and merchants are able to reach a wider range of consumer groups at a lower cost.
Lin Xin's story is just one microcosm of the many businesses that have benefited. According to a contact lens merchant, for companies with 150 stores on the platform, Pinduoduo has reduced the store's basic margin from 1,000 yuan to 500 yuan, further reducing operating costs. The person in charge of the company said that they could receive a return of 75,000 yuan for the store deposit alone.
▲A contact lens merchant plans to invest the saved costs in product development and production
Zhu Keli, executive director of the China Information Association and founding president of the National Research Institute of New Economy, believes that the "10 billion reduction" plan launched by Pinduoduo is an important reshaping of the ecology of the e-commerce industry. This plan not only directly reduces the financial pressure on merchants and improves the capital turnover rate, but also brings consumers a more diversified and high-quality selection of goods, especially for consumers in remote areas, which helps to narrow the gap between their consumption level and that of the city. From a more macro perspective, this policy enriches the types of goods on the platform, enhances consumer stickiness, and forms a benign interaction between the platform, merchants and consumers.
Competing for high-quality merchants has become the key to the future competition
For Pinduoduo, investing in the 10 billion reduction plan means that short-term revenue and profits may be affected to a certain extent. So, why is Pinduoduo willing to risk short-term profit decline and increase support for merchants?
The logic behind this strategy is that as the market enters the stage of stock competition, e-commerce platforms gradually have new trade-offs, and the optimization of the supply side is directly related to the financial health of the platform and the competitiveness of commodity prices. Therefore, the platform has begun to shift from relying solely on demand-side subsidies to attract users, to in-depth changes on the supply side.
"Pinduoduo deeply knows that only through the optimization and upgrading of the supply side and meeting the deep-seated needs of consumers can we promote the long-term healthy development of the platform ecology. For e-commerce platforms, a strong supply chain is a prerequisite for serving consumers well. Zhao Jiazhen, executive director and co-CEO of Pinduoduo Group, said frankly that the management has reached a consensus and is willing to pay a huge price for long-term health.
Guo Yuqing, the founder of Lens Company Research, pointed out that in the future, the competition in the e-commerce industry will be more focused on the competition for high-quality merchant resources, because the user coverage rate is already very high, and the potential of high-quality merchants has yet to be tapped. Through the "10 billion reduction and reduction" plan, Pinduoduo aims to cultivate small and medium-sized businesses, support new quality merchants, and compete for high-quality merchants by providing financial support and optimizing services, so as to enhance the market competitiveness of the platform.
Cui Lili, executive director of the Institute of E-Commerce at Shanghai University of Finance and Economics, agrees. She pointed out that the future competition will revolve around merchant management, consumer experience, and platform services. Pinduoduo passed a new policy of 10 billion yuan reduction and exemption, which is intended to appease and win over businesses. Although the overall service revenue may decline in the short term, with the increase in the number of merchants and consumers' recognition of high-quality goods and services, it will provide a strong impetus for the subsequent development of the platform and form competitive pressure on other e-commerce platforms.
However, there are also some concerns in the industry, after the implementation of the 10 billion reduction and exemption policy, how to avoid the spread of low-quality goods while lowering the threshold for merchants?
In response, Pinduoduo responded that it would adopt a dual strategy of "strong support" and "resolute governance". On the one hand, we will invest tens of billions of resources to support new quality merchants and industrial belts with product and technological innovation capabilities, greatly reduce and reduce transaction fees for high-quality merchants, encourage high-quality ecological development, and improve the quality and efficiency of the supply chain. On the other hand, we will continue to increase investment in operations and technology, strengthen the ecological governance of platforms and merchants, eliminate unscrupulous merchants, and promote the optimization and upgrading of industrial belts.
According to the recently released financial report, Pinduoduo's R&D investment in the second quarter increased by 6% year-on-year to 2.9 billion yuan, mainly used for platform operation and R&D.
An e-commerce person, who did not want to be named, pointed out that by resolutely punishing illegal cheating, the platform has effectively safeguarded the legitimate rights and interests of high-quality merchants and fundamentally curbed the bad cycle of "bad money driving out good money". Pinduoduo's pro-business policy is actually a measure to benefit the people, aiming to optimize the shopping experience of consumers by improving the quality and efficiency of merchants, so as to form a virtuous circle within the ecosystem.
Guo Yuqing said that a series of measures by Pinduoduo not only simplified the rules, reduced costs, optimized the traffic mechanism, not only provided development dividends for merchants, especially small and medium-sized businesses, but also realized the "spiral" of the supply side of merchants through the organic combination of support and governance, and promoted the transformation of the entire e-commerce industry in the direction of sustainability and high quality.
Innovation has entered the fast lane of high-quality development
In fact, Pinduoduo's high-quality development strategy is far from being limited to the implementation of reduction and exemption policies, but through a series of innovative measures to promote the upgrading of the agricultural industry chain and the development of the rural economy.
Recently, Pinduoduo joined forces with 300,000 agricultural merchants to launch the "Duoduo Harvest Hall", covering 500,000 kinds of agricultural products such as vegetables and fruits, aquatic products and seafood. During the harvest festival, the platform also invested 1 billion subsidy funds and 2 billion traffic resource packages to support emerging agricultural merchants. This measure not only directly improves the income of farmers, but also stimulates the vitality and potential of the agricultural industry chain.
In Wen County, Jiaozuo City, Henan Province, the results of this strategy have begun to appear. Pinduoduo merchant Ma Weimin's iron stick yam ushered in a bumper harvest season, and the output increased by 40% compared with the same period last year. What's even more gratifying is that he also drove the surrounding farmers to participate in Pinduoduo's activities. Ma Weimin said that through the Pinduoduo platform, they successfully bypassed the middleman link and sold their products directly to the whole country. At the same time, the information services provided by the platform allow them to grasp the market dynamics more accurately and flexibly adjust the planting strategy. At present, the average daily sales of individual stores have approached 300 orders, and it is expected that the sales volume will be more considerable during the concentrated mining period.
In Zhouzhi County, Shaanxi, kiwifruit also ushered in a bumper harvest. Pinduoduo merchant Li Wei's store has soared to 6,000 orders per day through the platform's promotion tools and operational strategies, and he is full of confidence in this year's sales prospects.
However, the challenges facing the development of agriculture on the mainland are not only limited to the marketing link, but also have problems such as low degree of modernization, insufficient intensification, and lack of professional personnel.
Pinduoduo is starting from the source and helping farmers resist market risks by building an efficient production and marketing docking mechanism. In addition, through the holding of agricultural research competitions and the establishment of "Duoduo Classroom", we will cultivate diversified talents needed for rural revitalization and promote the sustainable development of agriculture.
From the perspective of the industry, this series of actions of Pinduoduo not only enriches its commodity ecosystem, but also promotes the transformation and upgrading of the rural economy at a deeper level. This is not only an innovation of business model, but also a vivid practice of enterprises actively fulfilling their social responsibilities and helping social development.
(Author |.) "Caijing" new media writer Shu Zhijuan | Wen Wang Jingya | Edit)