Abstract
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.
Highlights
In recent years, mainstream e-commerce companies such as Tmall, Jingdong, and Suning have taken 90% of the market share in the e-commerce sector
This article uses the moat theory to analyze the current business model of Pinduoduo and proposes some suggestions for its future development strategies based on the analysis
Due to the poor commodity quality, low price and most of the users are pricesensitive in the sinking market, the moat in intangible assets and customer swiching cost is weak
Summary
Mainstream e-commerce companies such as Tmall, Jingdong, and Suning have taken 90% of the market share in the e-commerce sector. The whole e-commerce industry is booming and has fierce competition. At this point, it is not easy for new entrants to gain a particular market share and overgrow, but Pinduoduo has done so. It is not easy for new entrants to gain a particular market share and overgrow, but Pinduoduo has done so It has become the third-largest e-commerce platform in China by using its unique social e-commerce model and social platform’s traffic like WeChat, targeting people with high price sensitivity. If companies do not want to be eliminated from the market, they must adopt a business model that suits them to create differentiation by winning attention and expanding the market scale and influence to achieve profitability in the competition eventually
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