Pinduoduo: 300+ Million Shoppers Teaming for Good Deals
Set in 2018, the case highlights the latest developments in China's retail industry, with a specific focus on online retail. The growing penetration of smartphones, rising popularity of social media, prevalence of trusted digital payment systems, and government policy to integrate the internet into the country's future social and economic development have set China on the course to be the global leader in e-commerce. Mobile technologies, big data, artificial intelligence, and the internet of things (IoT) technology have transformed the process of value creation and supply chain management for brands and retailers in China. In July 2018, Pinduoduo (PDD), a social commerce platform backed by Tencent successfully raised USD1.63bn in an initial public offering (IPO) in the US, making it one of the biggest US listings by Chinese firms in the previous four years. Established for less than three years, PDD's phenomenal rise to the number-three position in China surprised many in the industry, including market leaders Alibaba and JD.com. It developed a new online group purchase model, teaming buyers via social media and focusing on consumer demands from rural regions. Its steep growth underscores PDD's success to investors. As the company enters its post-IPO era,what are the strategic options for PDD to sustain its growth?