Is Pinduoduo reliable? Where do low-priced products come from?

　　Pinduoduo has been established in less than two and a half years, with 200 million users, and its monthly active users doubled in half a year. A person in the capital circle told Pinwan that Pinduoduo's daily orders exceeded JD.com. But it has another side - netizens bluntly complained about Pinduoduo's "garbage" and "fraud" on various social platforms. Data released by the China E-Commerce Research Center shows that in 2016, the number of complaints in Pinduoduo jumped to the top in the industry, reaching 13.12%.

　　Xiaoying, a merchant in Pinduoduo , said that the profit margin of this type of ultra-low-priced products is only one or two yuan, and there is even no profit at all, but it can be used as a traffic diversion model - users are attracted by ultra-low-priced products and may not be really bought, but there is a high possibility that the purchase page recommends store-related products.

　　Under the dual-oligarchical competition pattern of Alibaba and JD.com, the key to Pinduoduo's rapid acquisition of users is social and low prices - allowing products with unreasonable prices to be spread spontaneously through user sharing and group buying on WeChat. Those who are willing to spend time on finding low-priced products are "hit".

　　Aurora Big Data shows that 70% of these users are women, 65% come from third- and fourth-tier cities, and only 7.56% come from first-tier cities, which is in sharp contrast with JD.com.

　　So, where do the low-priced Pinduoduo products come from? Can the factory still make profits by producing these low-priced commodities?

　　There is no way to save money in the production and processing of clothing. The only way to reduce the price is to compress circulation costs. On the e-commerce platform, the price of a certain brand is lower than that of physical stores. On the one hand, the e-commerce platform has given up some profit margins. On the other hand, e-commerce no longer stocks up in half a year of inventory like traditional industries. Instead, different layouts produce a small amount of goods first to try, and then increase production if it is explosive.

　　On Pinduoduo, the price of a pair of jeans is only 20 to 30 yuan, which is far from the fabric and production cost of jeans.

　　There are several main sources of such unreasonable low-priced clothing:

　　First, the merchant has been holding up inventory for many years. Merchants began to clear inventory at small profits or cost prices, but they couldn't clear it after many years. They urgently needed funds to be recovered. They were already in a mentality of returning 10 yuan for 10 yuan.

　　Second, the factory produces the remaining fabrics of OEM clothing and processes them into clothing. This part of the fabric has no cost, the cost is only the worker's wage. But there will not be many clothing produced in this way.

　　Third, if the fabric produced by the fabric manufacturer is unqualified (formaldehyde exceeds the standard, etc.), the purchasing customer will not want it and deal with it at a low price to the factory. This type of fabric is generally sold by pounds. The cost of a piece of clothing is only a few cents, which is equivalent to no fabric cost. Moreover, there are many such fabrics.

　　In fact, the costs of workers are also being compressed, as clothing production has shifted from the original factory production line to small home-style workshops.

　　The products made by small workshops have no testing steps or standards, and even different workers make different products.

　　In the manufacturing industry, quality control is actually one of the main reasons for the rising cost. The difference between good towels and bad towels is that good towels intercept defective products in the factory before shipment. The overall yield rate is getting better and better, which has also brought objective growth space to platforms like Pinduoduo - even if there is no quality control, there are much less products that cannot be used at all than in the past. (Source: Seller Information)

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