Pinduoduo(PDD) is a leading social ecommerce company in China that just went public on July 26th 2018, less than 3 years after it was founded. With over 300 million active buyers, it has risen to become one of China’s top 3 shopping apps, right behand Taobao and JD. PDD’s success results from its business model and technical strategy.

PDD has a different business model compared with competitive incumbents. Many people compared it to Groupon, because customers forming a shopping team with friends can win discount price. But PDD focused more on social network, rather than strangers. It encourages customers to share links among their friends on social platform like WeChat to win rewards, invite their friends to join shopping team to get discount, and invite friends to register as new users to get bonus. In this way, PDD achieved a rapid growth of users. In addition, by offering low-price goods, PDD focused on low-income customers mostly living in tier 4 or lower tier cities. This is a customer group that has been ignored by incumbents before but has great potential with penetration of mobile telephones.

PDD makes use of technical strategy to increase customers’ stay on the platform. Taobao/JD and PDD have completely different user behaviors: Taobao/JD users find products through keyword search, while most of PDD users are looking at which special deals are available every day. By the AI and recommended system, PDD can recommend right products to the right users based on product popularity and users’ purchase history.

PDD’s success comes from both demand side and supply side. On demand side, it catches an overlooked market with low-income customers, who pursue lower price and have plenty of free time. On supply side, it offers opportunities for small retailers who are crowded out by the negative same-side effect on big platform like Taobao and JD.

Although PDD is facing the complains of poor quality, slow delivery, misleading ads and so on, it is a new force in China’s hypercompetitive ecommerce market. A lot of brands and platforms can take cues from PDD’s success.

Source:
1. https://walkthechat.com/pinduoduo-close-look-fastest-growing-app-china/
2. https://medium.com/@hanstung/how-pinduoduo-works-e8abe6db94e6
3. https://techcrunch.com/2018/07/26/the-incredible-rise-of-pinduoduo/

Logistics industry is disrupted by emerging technology. As we know, traditional logistics industry highly depends on labor resources. Instead, unmanned logistics system is being achieved through unmanned warehouse, unmanned mainline delivery and unmanned end delivery. Unmanned warehouse aims at autonomous storage, picking, packaging, sorting and so on. Unmanned mainline delivery aims at long-distance transport by autonomous trucks. Unmanned end delivery solves the last-mile-delivery problem by using drones and autonomous vehicles.
The technology of autonomous driving has long been discussed and developed by companies like Google、Tesla and Baidu. Autonomous driving depends on bigdata, crowdsourcing, sensors and vision technology. Although the technology has been greatly improved, lack of security test made it cannot be fully applied in real commercial situation in a short time. For example, most people are unwilling to take autonomous cars at present. However, in China, the prosperous ecommerce promotes logistics industry and this becomes a realistic application area for autonomous driving and drones.
In China, the demographic dividend is disappearing and there will be a shortage of couriers and truck drivers in the future. So unmanned logistics system is a good solution. Main ecommerce companies such as Alibaba Group, JD Group and express company like SF express are engaged in unmanned logistics system. In downtown area, small autonomous logistics vehicles are in experimentation to delivery small goods in communities. In rural area, drones are tested to be a main force for delivery because of the inconvenient transportation and sparse population. Thus, unmanned logistics system lowers the cost of logistics industry and breaks the barriers for ecommerce companies to enter more potential market.
Unmanned logistics is disrupting traditional logistics industry. However, there are still many problems to be solved. Firstly, the performance of autonomous vehicles and drones used for logistics should be improved to achieve higher level of safety, accuracy and capacity with lower cost. These of course require more advanced and mature technology. Secondly, regulatory approval and legislation changes are needed for nationwide use of unmanned delivery, such as related policies and emergency plans. Thirdly, the supporting facilities for unmanned logistics should be facilitated, such as intelligent cabinets which are used to store packages from unmanned logistics which can only be opened by its holder and distribution stations in rural area to finish the last journey of delivering packages.
In all, logistics industry has been disrupted by emerging technology and unmanned logistics will play an important role in the future. As for now, there are huge chances for high-tech companies and incumbents of logistics industry who retain existing logistic network.

Sources:
1.Heutger, M., M. Kückelhaus, K. Zeiler, D. Niezgoda, G. Chung. (2014) Self-Driving Vehicles in 21 Logistics. DHL Trend Research.
2.https://cerasis.com/2017/05/24/autonomous-vehicles-in-logistics/
3.https://36kr.com/p/5136791.html
4.http://www.xinhuanet.com/info/2018-07/23/c_137342324.htm