Group Buying 2.0: Pinduoduo – China’s Social Commerce App
Chinese social commerce app Pinduoduo (PDD), China’s fastest-growing e-commerce app, is driven by the appeal of a discount linked to buying in a group.
PDD, which sells products across categories like food, clothes and homeware, is also enhanced with gamification features such as hidden bargains and hourly changing flash sale deals. These play on consumers’ FOMO (fear of missing out) and appeal to price-sensitive female users. A facility for live chat with peers emulates the social aspect of in-person group shopping.
PDD is located within WeChat, China’s most successful social media app, counting 963 million monthly active users in 2017 (Tencent, 2017).
- Group Buying: The core appeal is collective bulk buying. Consumers can benefit from a discounted price (up to 50% off) when they find another friend to join, with invitations sent out via WeChat.
- Cash Rewards & Free Products: Rather than spend on advertising, PDD incentivises users by giving them free products and cash rewards (up to 20 yuan a day) when they find others to use the app. The best are featured on a public leader board, stirring up a spirit of competition.
- Seamless Payment: Powered by WeChat Pay, payment for purchases is handled within the app. Users can opt in for password-free one-click payments after the first purchase. More than 75% of China’s sales are likely to be by mobile devices in 2018 (eMarketer, 2017). See also Uni-Commerce: Chinese Retail Focus.
Currently only available in China, the app demonstrates the power of a blend of social commerce and gamification techniques.