Pinduoduo raises $3 billion in financing. How to reborn

　　Pinduoduo, which has experienced the turbulence of the e-commerce industry in the past three years, has been marked by "wild growth" by public opinion. Many of the fatal shortcomings of e-commerce companies, such as cheap, counterfeit goods, and low quality, are linked to Pinduoduo. Now Pinduoduo is looking for a way to take off these hats. On April 12, it was reported that Pinduoduo completed a new round of nearly US$3 billion in financing, with a market value of nearly US$15 billion. In addition, the Taobao low-priced version, which was previously regarded by the industry as used by Alibaba and JD.com to resist the impact of Pinduoduo and the launch of the JD.com Pinduoduo has all been at the forefront of public opinion in the past two months. However, in addition to adding another firewood to Pinduoduo's popularity, it is still unknown what substantial changes can US$3 billion bring to Pinduoduo.

　　Funding support is unstable

　　The rampant doubts about Pinduoduo did not prevent Pinduoduo from obtaining the blessing of capital. On April 11, some media publicly reported that Pinduoduo has completed a new round of nearly US$3 billion in financing, with a valuation of nearly US$15 billion. Investors include Tencent and Sequoia. Tencent, which provides fertile traffic for Pinduoduo in the early stage, is the leading investor. Beijing Business Daily reporters have verified the financing matter with Pinduoduo, but as of press time, Pinduoduo has not made a public reply.

　　Compared with many vertical e-commerce platforms such as Alibaba and JD.com, which occupy half of the e-commerce field, and Jumei Youpin, which has gained a foothold, Pinduoduo's journey from obscurity to being a household name seems to be "once overnight". According to public reports, although Pinduoduo has been established for less than three years, the total transaction volume in 2017 has exceeded 100 billion yuan. When the annual transaction volume of Taobao, JD.com and Vipshop exceeded 100 billion yuan, it took five, ten and eight years respectively in 2008, 2013 and 2017 respectively.

　　Now, when Pinduoduo's valuation approaches US$15 billion, Vipshop only reached US$11.058 billion when the U.S. stock market closed on April 10. Pinduoduo's rapid success is regarded by the industry as a "dark horse" that has grown up with high stickiness by social interaction. When WeChat has not yet become the focus of e-commerce companies' competition, Pinduoduo has begun to rely on social interaction in WeChat to achieve traffic fission. However, an e-commerce analyst who did not want to be named told the Beijing Business Daily reporter that Pinduoduo's rapid development is a bit "unstable". The low prices brought by the group buying model or the low prices formed after the bargaining of acquaintances is only aimed at consumers who are extremely sensitive to prices. It is not ruled out that there are products with excellent quality in Pinduoduo, but the pursuit of low prices means that it is difficult for Pinduoduo to gain recognition from mid-to-high-end consumers.

　　Zhao Zhenying, deputy director of Beijing Zhongqingyan Information Technology Research Institute and researcher at the National Engineering Laboratory of E-commerce Transaction Technology, said in an interview with Beijing Business Daily that US$3 billion is not a small amount, but it is not easy for Pinduoduo to use this to seize mid-to-high-end consumers or build a relationship between merchants and consumers. US$3 billion is difficult to change the current situation of Pinduoduo.

　　Judging from the products sold on Pinduoduo, the low price is indeed the highlight. On April 11, the prices of products recommended on Pinduoduo’s homepage did not exceed 50 yuan, and the products of about 30 yuan accounted for the majority of them in the clothing category. But in the view of Huang Zheng, founder, chairman and CEO of Pinduoduo, Pinduoduo attracts "people who pursue high cost performance" and is not a low-end customer base. In an interview with the media, Huang Zheng said that low prices are just a way for Pinduoduo to acquire users in stages. The core of Pinduoduo is not "cheap", but satisfying the user's feeling of "taking advantage".

　　Deeply trapped in low prices and low quality

　　In order to satisfy consumers' mentality of "taking advantage", Pinduoduo's "bargaining for free" has become the focus of new complaints.

　　A Beijing Business Daily reporter found that in the model of sending links to ask friends to bargain, the cut prices showed a decreasing trend. A consumer said that a Midea electric oven worth 392 yuan can be cut by more than ten yuan at the beginning. As the number of participants increases, the lower the price it can be cut. The first time the product can be cut off 74.13 yuan, and the amount that can be cut off is as low as 10.99 yuan. When the product price is lower than 200 yuan, the price that consumers can cut off is as low as 0.06 yuan and 0.05 yuan.

　　In the "2016 (Part 1) China E-Commerce User Experience and Complaint Monitoring Report", Pinduoduo's complaint rate ranks first among retail e-commerce companies. On February 7, Pinduoduo frequently appeared in the "2017 "Double 11" Online Shopping Price, Quality, and After-sales Service" released by the China Consumers Association. Among the three counterfeit sample categories surveyed: bags, cosmetics, and footwear samples, merchants on the Pinduoduo platform have appeared in all three counterfeit sample categories.

　　Many consumers also directly pointed out in their messages on Pinduoduo’s page that the product quality is not up to standard. In a comment on a TV that costs 450 yuan, a consumer named "Chasing Dreams" said that the TV is fake, not a trump card, and has no clarity at all. Some media previously reported that Pinduoduo has frozen tens of millions of yuan in payment and is suspected of using anti-counterfeiting to make profits. In February this year, Pinduoduo released the "2017 Pinduoduo Consumer Rights Protection Annual Report" to confirm that in the past year, Pinduoduo removed 10.7 million suspected infringing products and intercepted 40 million infringing links throughout the year. It can be seen that the quality of goods that is difficult to strictly control is a difficult problem for consumers, merchants and even platforms. Faced with the above difficulties, Pinduoduo seeks ways to solve the problem. It is understood that Pinduoduo has established a 150 million yuan consumer protection fund to help consumers handle after-sales disputes and protect their rights claims.

　　Social communication volume is difficult to develop value

　　Although Pinduoduo's low prices have been criticized by the industry, e-commerce platforms such as JD.com and Alibaba have begun to fight back. Alibaba has established a Taobao low-price version, and JD launched the JD Pinduoduo Grouping Festival to try to use low prices to resist the impact of Pinduoduo. At the same time, JD.com, Meili United Group and Vipshop have begun to explore the amount of social communication in WeChat and seek the possibility of obtaining new traffic. When e-commerce giants begin to respond, whether Pinduoduo can still consolidate its existing position becomes unknown.

　　In an interview with Beijing Business Daily reporters, Zhao Zhenying said that Pinduoduo has indeed used a combination of low prices and social interaction to gather a large number of users in the short term, and will obtain goods from the funds to obtain traffic, and then exchange traffic with goods. As traffic gradually enters the bottleneck period, Pinduoduo's model is reference-oriented, but it does not mean that Pinduoduo can achieve long-term development through this method.

　　Zhao Zhenying bluntly stated that when Pinduoduo quickly obtains traffic, how to preserve valuable traffic and find new ways to make profits is the key, and it is also the key to whether Pinduoduo can successfully transform. When many consumers consume, they will form certain user commonalities. Brands and e-commerce platforms can analyze potential consumer needs based on user commonalities. However, the consumers gathered by Pinduoduo are all price-sensitive consumers, and have no specific demands for the performance of the product, and the commonalities of users are not obvious. Therefore, it is difficult for Pinduoduo to develop user value based on consumption habits and cannot depict user portraits, which means it is difficult to scenario and monetize traffic. Acquisition of traffic is Pinduoduo's strength, but it may not be able to discover valuable traffic and continuously develop traffic.

　　In Zhao Zhenying's view, if Pinduoduo continues to develop according to the current model, it will still be difficult to compete with Alibaba and JD.com in the long run. The strong relationship formed by Pinduoduo relies on software to gather consumers is not stable, especially in the era of the Internet of Things, the role of application scenarios will be expanded, and social functions will gradually be weakened, and social itself is difficult to monetize.