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Find here the Daxue Talks episode 30. Olivier Verot is sharing his thoughts about Pinduoduo’s cross-border platform and gives precious advice on how to leverage it for your business in China.

Full transcript below:

Interviewer: You are servicing clients in Pinduoduo cross-border e-commerce, what kind of platform is a Pinduoduo cross – border?

Olivier: For everybody, it is basically a group on the platform so you just go to this website and people can buy things which are extremely cheap if they can share this with their friends. So it’s a kind of way of making massive promotions. Pinduoduo dosen’t really start at the beginning with brands, they are targeting more at the wholesaler who can buy the thing very cheap and resell it at very cheap price to a lot of people who are in a subsidy in China. Pinduoduo want to increase their image in China to reach higher level customers so they try to market a lot of good brands like Apple or this kind of things so they try to advertise this to attract people to change a little bit about their image. They also offer some oversea brands opportunity to do cross-border. In the same way. You go to Pinduoduo, you just market something, after the deal is done, it’s done and disappear.

So for all the brands that have a supply of products and want to sell it. For all the brands that want to sell something with minimum cost because everything in Pinduoduo is very cost-effective. It doesn’t cost much to open a store and make an operation. So everything is very cost-effective. The reality is that if you reach people to get this deal up, we’ll share this to 20 or 30 of their friends, it will create another group. So you can create a word-of mouth for that. We think it’s a very good platform for all the brands who don’t have the money to go to T-mall, just like the talk about this in the last video, T-mall is not realistic for every brand, because you need to have a certain budget, you need to be of a certain size. Pinduoduo offers an alternative. For us, as a  marketer in China, we believe the beginning of the platform when they are not so famous and they want to sell something, it is a good time to sell in it.

Interviewer: Between 2010-2012, a lot of group buying websites appeared and disappeared in China, is this Pinduoduo a kind of group buying and how different is it?

Olivier: A lot of groupings are still surviving, many of them sell  tickets of entertainment, concert, cinema or some stuff in local restaurants. The reason why a lot disappear also is because of the dianping, taking the biggest share of all restaurants so didn’t give them a lot of space. But the market of the wholesalers who are selling the brand cheaper was not taking grouping like this. They are more other stuff so they just enter there, catch this big wholesale plus all the network and stop by making this offer. And after the variety of the platforms make the other. I think the key of Pinduoduo is to have a very close relationship with WeChat and open the groupon up, because  when you have a friend who invites 200 friends in 20 minutes and share a lot, you can buy something at a very cheap price. So it’s kind of like a spam so if the platform is not loaded by WeChat, we basically have no future. So strength partnership with WeChat and in other way which I cannot do it officially because it would mess up image of WeChat, so it’s kind of very smart partnership, so I guess if all the group die at one moment , because they depend too much on WeChat.

Interviewer: Dose it mean that Pinduoduo is more comparable to flash sales website than group buying websites?

Olivier: Yep. Also something different is the flashing website to resell something, Pinduoduo doesn’t deal with brands, they deal with wholesale of the brand, they deal with the guys who are buying the thing in the supermarket that are not sold, but it’s not the brand officially, the brand never really allows anything to sell in Pinduoduo at the moment because there are a lot of problems or fake products.

Daxue Talks is a show powered by daxue consulting, a china-based strategic market research company founded in 2010! With Daxue Talks, you will stay up to date with all the latest business updates in China.