Recent movements in the stock market have seen Pinduoduo (PDD) experiencing a notable upswing. The company’s shares increased by 10.45% on December 9, extending its upward streak to four consecutive days and attaining a cumulative gain of 12.07% during this period. This positive momentum reflects investor optimism as the e-commerce platform gears up for the annual "Double 12" sales event, a crucial period following the completion of the "Double 11" shopping festival.
As major e-commerce players like Kuaishou, Douyin, Taobao, and JD.com unveiled their "Double 12" promotions, Pinduoduo adopted a different strategy. Instead of heavily advertising, it initiated discounts as early as November 22, aiming to prolong the momentum from "Double 11" and position itself to capitalize on the heightened buying season of "Double 12". By December 8, ahead of rival campaigns on December 9-12, Pinduoduo launched an intensified "Super Add-on Price" promotion, providing discounts up to 50% in addition to existing subsidies and promotions.
Pinduoduo's strategy involves undercutting prices through extended subsidies, attracting both a growing number of consumers and brands. The "Super Add-on Price" initiative from previous sales events has emerged as a significant catalyst for brand growth, seeing increased participation from both domestic and international brands, which include notable product categories such as beauty, personal care, baby products, food, and home appliances.
A highlight of the promotion includes lucrative deals such as SK-II Facial Treatment Essence priced at a steep discount, Dyson hairdryers with a significant price cut, and Nike apparel featuring substantial markdowns. In the domestic arena, brands such as Ecovacs and Li-Ning are also offering notable discounts, aligning with Pinduoduo's vision of making high-quality products accessible at affordable prices. To complement this, Pinduoduo has revamped its price protection policy, mitigating consumer concerns of artificial price inflation before sales.
Moreover, the "Double 12" period sees the continuation of the "100 Billion Yuan Subsidy" campaign, where consumers are eligible to receive sizeable vouchers and further discounts. These efforts are designed to maintain a high promotional intensity into the new year, potentially setting the stage for sustained growth.
Pinduoduo's efforts to enhance merchant experiences alongside consumer promotions are significant. The company has invested significantly in improving its merchant ecosystem, reducing trade costs, and enhancing operational efficiency. Initiatives like refunds on service charges, elimination of logistics transit fees, and upgraded merchant support aim to foster a healthy and sustainable business environment on the platform.
The "Super Add-on Price" event acted as a growth engine for various categories, with some products achieving exponential sales increases. This has not only driven sales for participating merchants and brands but has also reinforced Pinduoduo’s position as a key player in the competitive e-commerce industry, strategically leveraging discounts and subsidies to retain and expand its user base.