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HomeTechWhy Pinduoduo is putting all its profit into agriculture – TechCrunch

Why Pinduoduo is putting all its profit into agriculture – TechCrunch

For the previous few years, Pinduoduo has been broadly thought to be Alibaba’s strongest challenger.Alibaba reviews 863 million energetic shoppers yearly throughout its retail platform 12 months until September, Pinduoduo month-to-month Over 740 million energetic customers In the quarter that ended in September..

In pursuit of a brand new development engine, Pinduoduo is taking a unique route than its predecessors. Each e-commerce giants are starting to enter a interval of stagnation, however as an alternative of doubling cloud computing like Alibaba, Pinduoduo is pouring cash into agriculture.

In August, Pinduoduo 10 billion yuan ($ 1.57 billion) Agricultural applications to “face and handle the important thing wants of the agricultural sector and rural areas”. This initiative is complete, together with potential fairness funding for agricultural expertise start-ups and grants for primary analysis and human useful resource improvement.

This system is not profit-driven, and the corporate guarantees that all earnings from the second quarter and “all potential earnings sooner or later quarter might be allotted to the initiative.”

Some see Pinduo Duo’s funding in agriculture as an effort to alleviate rural poverty, and subsequently the reply to Beijing’s current name. “Common prosperity” This implies “richness shared by all, from a cloth and cultural standpoint.” Nonetheless, the corporate has repeatedly said that agriculture was a core enterprise from the start.

Based in 2015, Pinduoduo steadily expanded its product class after its success in promoting fruits on-line. For a lot of producers, e-commerce has been a boon. Agriculture in China was dominated by thousands and thousands of small family-owned farms. They relied on a demographic of distributors to promote their produce nationwide. The setup meant that farmers usually find yourself with very skinny earnings.

To draw agricultural distributors, Pinduoduo has deserted charges and mentioned in its earnings announcement final week that it plans to keep up its “future quarter” coverage. As soon as the farmer indicators up, the platform trains the farmer to develop into a educated digital retailer operator and marketer. Because of the mature supply community fashioned throughout China’s e-commerce increase, third-party logistics companies transport agricultural merchandise to shoppers as soon as an order is positioned.

It is not the one Chinese language web platform that is attempting to convey native produce to city properties. Alibaba’s Taobao has lengthy made “agricultural e-commerce” an necessary initiative. Video app like Kuaishou We assist farmers promote by means of livestreaming.

Nonetheless, Pinduoduo desires to assist farmers not solely promote, but additionally sort out farmers’ manufacturing issues.

“My group and I educated as engineers have been devoted to discovering expertise options to implement all through the agricultural provide chain,” mentioned Chen Lei, who took over Colin Huang as CEO of the corporate earlier this yr. enhance. Revenue on the phone..

“Our efforts to use agricultural expertise transcend provide and demand matching to the identification of upstream expertise options to enhance productiveness, dietary profiles and environmental sustainability. We additionally hope to make agriculture enticing to the youthful technology of tech savvy by enhancing the appliance of the expertise, “Chen added.

Along with gross sales and development, Pinduoduo is working with analysis institutes to implement trade requirements for merchandise reminiscent of meat and crops, the corporate’s vice chairman of finance, Jing Ma, mentioned in a press release.

As a Nasdaq listed firm, Pinduoduo is after all watched by traders. Within the third quarter, we recorded constructive working earnings for the second consecutive quarter, partly as a consequence of a discount in advertising and marketing bills. In the meantime, the corporate has shifted its focus to R & D spending. Almost 19% Third quarter working bills

It can take a while earlier than Pinduoduo’s agricultural funding begins to provide tangible outcomes. For instance, how would that expertise assist enhance the yields of the 16 million farmers promoting at Pinduoduo?

The corporate shares some early achievements.For instance, final yr to startups around the globe Grow the sweetest and most environmentally sustainable strawberries He claimed that the profitable group’s precision agriculture options had already been deployed on a number of farms.

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