Analysis on Pinduoduo Business Model and Future Development Strategy based on Sinking Market
Nie Cheng, Xinyu Huang, Jing Qian · BCP Business & Management · 2021
This paper analyses Pinduoduo's success and make suggestions to help it further improve its business model for the long term and provide a reference experience of similar e-commerce companies by using moat theory. In the long run, the competitiveness of its competitors in the same industry cannot be underestimated. In the current situation, Pinduoduo's moat is weak in terms of intangible assets and user conversion costs due to the poor quality of most of the products on its platform and that its primary users are price-sensitive users. In this context, the authors give following suggestions for its future development: 1. Highlight brand characteristics and ensure product quality 2. Create differentiated competitive advantages 3. Improve supply chain structure and back-end service system 4. Refined operation of existing users and stop blindly expand users.