Chinese social commerce company Pinduoduo recently launched a wholesaling platform “Duoduo Wholesale” for its merchants to power their supply chains and procure goods for resale. The new feature, not yet fully active, has been only opened to selected merchants who have the capabilities to supply in bulks.
“Duoduo Wholesale” page has 20 categories of merchandises including women and men’s wears, food, electronic products, groceries and home decorations, etc. The strategy of wholesale business fits Pinduoduo’s consumer-to-manufacturer (C2M) strategy. PDD’s C2M model provides merchants with user insights which make merchants better tailor their products based on consumer demands. This model leads to a virtuous circle of cost savings leading to lower prices, which in turn brings in economies of scale.
The launch of the new feature is in line with the increasing demand of the merchants. According to its 2019 annual report, Pinduoduo has accumulated more than 5 million active merchants which makes wholesale demand a natural need for this large group of platform’s users.
Alibaba’s similar business, 1688.com, a B2B wholesale platform founded in 1999, is one of the earliest wholesale platforms in China. Being a key part of the supply chain feeding retailers on Alibaba’s Taobao Marketplace and Tmall.com, 1688.com is one of the company’s earliest business units and attributed to an increase in average revenue from paying member on the platform, according to its annual report for the fiscal year ended March 2020.