本文来自微信公众号：新眸，作者：鹿尧，题图来自：AI生成
Only after refunding, Pinduoduo felt Tiktok to cross the river
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This article is from WeChat official account: New Eyes, written by Lu Yao, and the title is from AI Generation
Article Summary
After canceling the "refund only" policy, Pinduoduo has shifted from "extreme low prices" to content-based and industrial belt layout, attempting to reshape its competitiveness through short videos, live broadcasts, and factory direct connections. However, it faces challenges such as the solidification of users' low-priced mentality, conflicts among merchants, and slower performance growth. The transformation effect has not met expectations and it is difficult to get rid of path dependence.
• Rule adjustment: The cancellation of the refund policy only triggers conflicts between the platform and merchants, forcing Pinduoduo to balance ecological governance and growth pressure.
• Content based transformation: short video and live broadcast, imitating Tiktok, but with low conversion rate, traffic still relies on traditional commodity display logic.
• Competition for industrial belts: Intensifying the layout of industrial belt resources, attempting to strengthen the low price advantage through C2M mode, but facing conflicts in brand pricing system.
• ⚖️ Tiktok comparison: there is an essential difference between the content based path and Tiktok, which cannot be closed loop "grass planting conversion", and traffic distribution depends on platform rules.
• Path dependence: The marketing system is scattered and extensive, and short-term order taking tools still rely on price compensation, making it difficult to break through the bottleneck of refined operations.
• Performance pressure: revenue growth slows down, market value shrinks to half of Alibaba's, and the contradiction between industrial belt investment and short-term financial returns becomes prominent.
The dust of 'refund only' has settled, and the first to be pushed to the forefront are not consumers or merchants, but the wool party.
This adjustment is interpreted as a shift from "extreme consumer protection" to "balanced governance", targeting passive refunds under excessive platform intervention. However, it should be noted that this does not deprive consumers of their right to reasonable rights protection - for example, after receiving rotten fruits, people's reasonable demands for partial refunds through negotiation with merchants will still be protected.
This widely discussed rule can be traced back to 2014 when JD.com launched a self operated product only refund policy. The original intention was to improve local operational efficiency by reducing the time and shipping costs of returns and exchanges. However, no one expected that seven years later Pinduoduo would rewrite it as a heavy weapon of industry competition.
At that time, Pinduoduo had nearly 9 million merchants, mainly small and medium-sized merchants and white label brands, with low-priced products clustered and highly homogeneous SKUs. In addition, the natural short shelf life and high breakage rate of fresh food categories, coupled with the regulatory pressure brought by the massive transactions of 900 million active buyers, prompted the platform to adopt an "extreme consumer oriented" operational strategy to maintain growth.
We all know the story behind it. When Pinduoduo gradually expanded its refund only policy from the fresh food category to the entire category, the platform did indeed enter high-speed growth and also opened the prelude to industry competition. In the past few years, extreme price comparison and low price have become strategic keywords for almost all platforms, the most direct reason being to resist Pinduoduo's impact on market share.
However, with the gradual return of rationality in the industry in the past year, especially the complete cancellation of "refund only", industry competition has been re tuned - returning from "internal service competition" to "commercial essence", and Chinese e-commerce platforms have once again returned to the same starting line.
For the industry, this is indeed good news to rectify the situation, and it is time for all parties to engage in a comprehensive strength competition. But for Pinduoduo, the situation may be even more severe, and it must answer a more fundamental question: after stripping away the dual filters of extreme low price and extreme after-sales, what does this platform, which subverts the industry with "price comparison", rely on to maintain growth?
Price war cannot sustain Pinduoduo's core competitiveness
Every major decision adjustment of a large e-commerce platform is inevitably the result of systematic argumentation and multidimensional weighing.
Cancelling 'refund only' is no exception. On the surface, it appears to fix systemic vulnerabilities in the old model, but in reality, it is a concentrated outbreak of conflicts between the platform and merchants. The platform has to consider sustainable development and future strategic transformation.
According to merchant data, extreme rules have led to fluctuations in return rates, increased operating costs for small and medium-sized merchants, and a deeper crisis is that the ecosystem that overly relies on low price strategies is backfiring on the platform - Pinduoduo has long been the industry leader in product complaints and has significant merchant liquidity.
This explains why in Pinduoduo's recent intensive actions, the two main themes of "content-based" and "industrial belt narrative" have become increasingly clear and visible. The former is the common layout of the traditional shelf e-commerce platform in response to content e-commerce, while the latter is more based on a re combing under the original C2M gene. Interestingly, these all form a subtle echo with the development path of Tiktok e-commerce.
In fact, looking back at the actions of Pinduoduo in the past two years, these adjustments have already laid the groundwork.
In 2022, "Duoduo Video" replaced "Live Streaming" and entered the bottom tier entrance of the homepage. With the subsidy of real money, the peak DAU exceeded 150 million, and the daily average usage time of users exceeded 40 minutes; Starting from 2023, the platform will increase its live streaming business and attract external anchors through initiatives such as the "New Superstar Plan" and the "Hundred Production Plan" to promote the implementation of in store broadcasting models.
Content transformation was once seen as a new engine for Pinduoduo to achieve growth.
Last year, Duoduo's short drama became popular, and users were automatically recommended to match sales videos with relevant search records every few episodes they swiped. However, according to QuestMobile's statistics, compared to the conversion rate of 2% to 5% on mainstream e-commerce platforms' detail pages, the industry generally believes that the conversion rate of short video e-commerce is about 1% to 3%, and Pinduoduo's short video sales performance has also fallen short of expectations.
Since the launch of the "Billion Dollar Reduction" and "New Quality Merchant Support Program" in 2024, Pinduoduo has continued to tilt its resources towards the upstream of the supply chain. Content has become an important carrier of this strategy: influencers showcase the production processes of industrial belt factories and the traceability stories of agricultural products, packaging low-priced goods as "cost-effective choices" rather than simply "cheap goods".
However, compared with Tiktok, which takes "content is traffic" as its core, it realizes "goods looking for people" through algorithm recommendation; Pinduoduo's content is more like a digital upgrade of shelf e-commerce, with short videos and live broadcasts still mainly displaying product information, essentially a dynamic extension of traditional detail pages.
In other words, there is an essential difference between the content of Pinduoduo and Tiktok. As a result, it ultimately makes it difficult for the former to replicate the closed loop of "seeding conversion" of the latter, and traffic conversion relies more on platform rules - for example, merchants need to mount short videos to product detail pages through "targeted promotion" in order to achieve precise guidance.
Since this year, Pinduoduo has begun to recruit Tiktok live broadcast merchants and provide them with intelligent central control system support, which is regarded as a signal for the live broadcast business to seek external blood transfusion. However, the dual platform live streaming model also brings potential problems: how to coordinate cross platform pricing systems and avoid content homogenization, which have become practical challenges facing platforms.
From 'subsidy driven' to 'return to industrial belt': the pains of transformation are emerging
The self e-commerce industry has entered stock competition, and industrial belt merchants are being fiercely contested by major platforms.
From Yiwu small commodities in Zhejiang and the clothing industry belt in Guangdong, to flowers and plants in Yunnan and fur, grain, and oil in Northeast China, it is essentially the cluster production capacity, supply chain efficiency, and cost advantages behind them, which precisely meet the needs of e-commerce platforms in terms of traffic competition, user retention, and supply chain upgrading, directly supporting the low price strategy of e-commerce platforms.
Pinduoduo's layout around industrial belt merchants has become increasingly dense in the past two years. In 2023, we will upgrade the "Pinbing Brand" support plan. Last year, we launched the "Billion Reduction" program to save billions of dollars in promotion costs for millions of merchants. The "E-commerce Westward Expansion" plan aims to increase the number of orders in the western region. This year, we will establish a Merchant Rights Protection Committee and launch a billion dollar support plan.
A series of measures all aim at the same goal - to reconstruct the supply ecology centered on industrial belts.
In fact, the resources of industrial belt merchants should have been one of Pinduoduo's core competitiveness. The "white label goods" attribute perfectly matches Pinduoduo's user needs. In the early days, the platform directly connected to agricultural product production areas through the "agricultural land cloud consolidation" model. In 2020, it became the largest agricultural product upstream platform in China, verifying the supporting role of industrial belt resources in the low price mentality.
Pinduoduo's C2M has always been its differentiation model from traditional e-commerce. By analyzing user needs through big data and providing reverse guidance to industrial belt merchants in production, we can achieve "production based on demand", where there is production, there is sales, and then optimize the supply chain, ultimately forming a cycle of "low price sales cost optimization". This has almost become a steady win game under the logic of "buying together".
It is not difficult to find that the main role of industrial belt resources in Pinduoduo is still to support the continuous operation of the platform's "low price" model.
On the other hand, the spark of conflict between platforms and industrial belt merchants has emerged.
Taking the liquor industry as an example, according to media reports, major brand merchants generally regard Pinduoduo as an online Bairong market (the largest Baijiu distribution center in China), and almost all local liquor merchants also regard Pinduoduo as the main channel for low price inventory consumption. But for brands, what they fear is not low prices, but price breakdowns and chaos.
Traditional brands rely on a hierarchical channel system of "manufacturer → distributor → secondary distributor → terminal", with reasonable profit margins at each stage. But Pinduoduo's low-priced direct connection to consumers is equivalent to allowing distributors to bypass the second batch of merchants and directly reach the terminals, breaking the original price stratification. The same bottle of wine may be sold at a lower price online on Pinduoduo than through offline channels, which in the long run can lead to the manufacturer losing control over the channels.
For brands, the disruption of market prices is no different from the overdraft of brand image - from alcoholic beverages to various electronic products, the same problem can occur in almost every category.
In addition, for a long time, the value of industrial belt merchants on Pinduoduo has not been fully tapped.
After the rise of live broadcast e-commerce and short video delivery, the story of "direct supply from the source" of the industrial belt has become a natural flow material. This "production scene visualization" has reduced the cost of user decision-making, especially in line with the content e-commerce logic of Tiktok, Kwai and other platforms. By supporting industrial belt merchants, the platform can not only drive the transformation of contract factories into branded industries, but also enrich the content ecosystem and improve traffic monetization efficiency.
Therefore, many observant people have found that Pinduoduo, which has suffered setbacks in the fields of short video and live streaming sales, has now shifted its focus to storytelling for industrial belt merchants. But in the eyes of industry insiders, transformation is not an easy task.
On the one hand, users have a deep-rooted "low price mentality" towards Pinduoduo, and the quality attempts accompanying supply chain upgrades may face the risk of losing price sensitive users; On the other hand, the branding of industrial belt merchants requires long-term investment, testing the platform's resource allocation capabilities from technical support to market promotion.
The greater pressure comes from the performance aspect. According to the Q4 2024 financial report, Pinduoduo's total revenue was 110.6 billion yuan, a year-on-year increase of 24.45%, significantly slowing down compared to the same period in 2023; The net profit growth rate decreased from 60.73% to 17.9%, falling short of market expectations for two consecutive quarters. The growth rate in the first quarter of 2025 will further decline to below 15%.
Although the management attributed the reason to "external environment and merchant support investment" and emphasized that "short-term financial performance should not be the only evaluation criterion", the market did not buy it: two days after the release of the financial report, the stock price had fallen by more than 10% cumulatively, and the current market value of about 140 billion US dollars is only half of Alibaba's, and the advantage of market capitalization has significantly narrowed.
Difficult to get rid of path dependence
In the Chinese e-commerce industry, Pinduoduo has always been a special presence.
The company has a large scale, but the management rarely appears in public. Although it often does not follow the routine, it is like a machine that operates automatically at all times, "the most extreme and efficient", focusing on e-commerce, not diversified, with extreme price differences and the closest business model to Costco - this is the evaluation of Pinduoduo by the outside world during its heyday.
But as we all know, China has the most complex business scenarios and diverse trading rules, and the most essential thing is change. As the market tends to become more competitive, platforms are placing their growth expectations on "stock" and making good use of the so-called "refined operation" - but this term is not commonly seen in Pinduoduo.
From the perspective of industry conventions, a unified marketing hub is often an important indicator to measure the maturity of an e-commerce platform, such as Taotian's Alibaba mom and Tiktok's huge engine. They are not only the core source of profit, but also play an important role in integrating ecological resources and promoting cross platform collaboration, while providing systematic and quantifiable fine operation solutions for businesses.
Pinduoduo's marketing model is very different from theirs. As a group buying platform based on social e-commerce and low price strategy, Pinduoduo relied on "social fission" to open up the market in the early stage, forming a path of "platform led traffic distribution". The merchant advertising system focuses on social fission, low-priced promotions, and user growth. For example, "Duoduo Jinbao" has a commission sharing mechanism similar to Taobao customers, while "Billion Subsidy" attracts consumers through direct profit sharing.
It is worth noting that in Pinduoduo's main marketing methods, functions such as "bundling" and "bargaining" are essentially carriers of social communication and user fission, rather than traditional advertising systems. Although the merchant's backend integrates multiple products such as "Duoduo Search", "Duoduo Scene", and "Focus on Booth", their marketing system is still fragmented.
The limitation of this model is that it overly relies on price advantages and has obvious shortcomings in systematic and diversified business strategies.
Previously, Huang Zheng said that they preferred to build an infrastructure by refining and layering the national population, and opening data to businesses. Each category of population corresponds to a large number of factories, so as to meet their specific consumption needs. In this way, they can not only bring a steady stream of demand, but also meet the continuous supply.
But at present, this does not mean that the platform can completely avoid refined and differentiated operational logic.
Recently, Pinduoduo launched a video call function. Although the actual effect is still unknown, it is still seen as a signal of its attempt to refine operations. To some extent, this function can even be understood as a follow-up to the cancellation of "refund only". In the past, merchants relied on crude methods such as "full discount coupons" and "low-priced flash sales" to acquire customers. Nowadays, platforms are attempting to improve service quality through "one-on-one" video communication in order to achieve an increase in repurchase rate and average customer value.
Behind the transformation is the driving force of industry trends: when the cost of attracting new customers on platforms such as Taobao and JD.com has reached over a thousand yuan, extensive subsidies are difficult to sustain, and platforms and merchants have to turn to optimizing service processes and improving conversion rates to reduce marginal costs.
But for Pinduoduo, which started with social fission, the challenge may be even more daunting. Recently, it has been reported that after canceling the refund only policy, the platform has tested a redemption tool to reduce the return and refund rate. When consumers apply for a refund, the tool automatically sends the merchant's pre-set retention plan, such as providing compensation, in exchange for the cancellation fee holder revoking the application.
Essentially, this approach still solves problems through price measures and does not break out of the original logical framework. In other words, for this company, how to break away from the previous path dependence and balance short-term effects with long-term ecological construction on the road of refined operation will be the long-term challenges faced by Pinduoduo.
This article is from the WeChat official account: New Eyes, written by Lu Yao
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