Although Pinduoduo has only existed since 2015, the Chinese social commerce platform is already viewed as a rival to more established players including Alibaba, JD, and Taobao. As early as 2018 the app had a user base in excess of 200 million people, and when it was listed on the NASDAQ stock exchange in the same year it raised $1.6 billion – one of the biggest IPOs of 2018.
Pinduoduo has captured a vast market share by providing a unique service that caters to Chinese domestic needs and habits by offering incentives for bulk buying low priced goods, by providing group discounts, and by focusing on social shopping – in fact, it has been described as a mix between Facebook, Groupon, and Costco.
What does Pinduoduo sell?
With more than one million individual sellers, Pinduoduo’s inventory is centered on cheap domestic products such as household goods, cosmetics, food, and inexpensive clothing. The app rewards the sharing of deals and discounts throughout a user’s network, thus encouraging consumers to share deals as widely as possible. As a result, they buy products as part of a group and receive bigger discounts (sometimes up to 90%). This has the effect of encouraging community shopping, which in turn can make good deals go viral and keep the average prices lower.
The average consumer spend on Pinduoduo is $6, whereas on Taobao it is $30, and on JD it is as high as $60.
How is Pinduoduo different to other eCommerce platforms?
Pinduoduo is one of several Chinese apps such as RED and WeChat that blend social media with eCommerce. Although it has become extremely popular in countries like China, social commerce is still less common outside of Asia and many brands are yet to perceive the opportunities and threats it presents. What is clear though is that counterfeits and other IP infringements are already present on social commerce apps and should be monitored.
Which brands are counterfeited on Pinduoduo?
Counterfeiting on Pinduoduo is a serious problem that has been occurring since the platform began. As early as 2016, research by the China E-Commerce Research Center suggested that the platform had received more complaints about counterfeits than any other comparable site. Then, in 2017, Pinduoduo stated that it had removed more 10 million problematic products and enforced against 40 million links to infringing goods, a sure sign of the scale of the issue.
It has also been the subject of numerous lawsuits including one from the Chinese company, Daddy’s Choice, which accused it of repeated violations of its trademarked baby care products. In 2018, Pinduoduo was also investigated by the State Administration for Market Regulation following the Skyworth Group’s complaint over counterfeit television and audio products on the platform.
So, who should be monitoring for counterfeits on Pinduoduo? The platform’s focus on heavily discounted consumables makes it a more appropriate watch for FMCG brands than it does for luxury, but we would advise all brands to be wary. For brands who do produce lower-priced items, however, Pinduoduo should be one to watch closely.
How can I stop IP infringement on Pinduoduo?
In 2018, Pinduoduo introduced an IP reporting platform. This means it is now possible for brands to register their IP rights and to complain about infringements in a more systematic way than through emails and in-app notifications. However, the platform is still very problematic to report against for several reasons. First, many of the popular products on the app are the result of flash sales which sell high volumes rapidly and then disappear. This means that brands need to monitor the app daily, which they may not have the resources to do.
Additionally, removing infringing listings on the Pinduoduo app requires detailed information in Chinese, which can be extremely difficult for non-Chinese speakers. Using a brand protection service provider with in-country personnel will be more efficient and effective in this regard and your brand will be much safer. Did you know that since our recent acquisition by Corsearch, Pointer now has one of the largest China-based analyst teams in the world? Talk to us today to find out how we can help you stop counterfeiting and other forms of brand abuse.