After the implementation of the new policy of "10 billion reductions and exemptions", the business account book of a small business in Pinduoduo

Pinduoduo's "10 billion reductions" are really falling on the business of merchants.

The basic deposit of the store has been reduced from 1,000 yuan to 500 yuan, the technical service fee for the first use and pay later orders has been reduced from 1% to 0.6%, and the logistics transit cost in remote areas has been borne by the platform...... Each one is a significant cost reduction for merchants.

As Chen Lei, chairman and co-CEO of Pinduoduo, said at the financial report meeting, Pinduoduo will invest tens of billions of resources to vigorously support new quality businesses and new industrial belts with product and technological innovation capabilities, and greatly reduce the transaction fees of high-quality merchants, which is expected to be reduced by 10 billion yuan in the next year.

"Several policies are particularly good for merchants, and the sense of trust in the platform has also been enhanced." Chen Caibin, e-commerce operation manager of Shantou Chaoting Food Co., Ltd., told the 21st Century Business Herald reporter.

According to industry analysts, since its inception, the Pinduoduo platform has reached a considerable scale, and ecological governance is also necessary. Management has also reached a consensus that it is ready to sacrifice short-term profits and invest in the long term.

Building a healthier and more sustainable e-commerce platform is the focus of Pinduoduo's current development, which can not only attract more merchants to settle in, but also improve the shopping experience of consumers, so as to achieve a win-win situation for the platform, merchants and consumers.

Effectively reduce costs

Merchants who open a store on Pinduoduo usually need to pay a security deposit, technical service fees, and other fees including advertising and logistics, which are all important parts of the merchant's cost. Pinduoduo's "10 billion reduction" basically covers all the aspects mentioned above.

In terms of margin, the margin that merchants need to pay for entry is divided into basic margin and category margin, of which the basic margin is reduced from 1,000 yuan to 500 yuan. At the same time, the initial deposit for newly settled individual stores and enterprise stores will also be reduced to 500 yuan. It is reported that the first batch of merchants to enjoy the policy has covered nearly 70 categories.

"Duoduo's margin is already very low in the industry." Chen Caibin told the 21st Century Business Herald reporter that the reduction further reduces operating costs, especially for businesses that operate multiple stores. For merchants or self-employed individuals who have not yet settled in, the entry threshold will also be lowered.

In terms of technical service fees, Chen Caibin said that before, each transaction order would be charged 0.6% of the technical service fee, if the use of first use later pay, then on top of this will be superimposed 1 point of technical service fee.

A few days ago, Pinduoduo launched a refundable technical service fee to merchants who signed up to participate in the resource slot activities on the site, and after the user initiated a refund, the platform will refund the basic technical service fee of 1% of the first use and then pay for the order, and 0.6% of the basic technical service fee for other orders.

Subsequently, Pinduoduo upgraded the "technical service fee return rights", and the orders generated by merchants' participation in resource slot activities enjoy the service fee refund rights, and the rate of technical service fees is reduced from 1% to 0.6%, that is to say, the technical service fee of the merchant's use first and pay later activity orders is directly discounted by 6%.

As a result, merchants' costs per transaction can be reduced, and consumers' preferred use now, pay later can also be more widely used, further improving the shopping experience of consumers while keeping the merchant's costs under control.

On the other hand, logistics in remote areas is also one of the main pain points for merchants. In the past, when purchasing goods in Xinjiang, Tibet and other regions, it was usually necessary to send the goods to the transit warehouse first, and then forward them to the consumers from the transit warehouse, which would incur transit costs. Chen Caibin told reporters that they had more than 10 yuan in transit fees for a single order.

Considering the cost issue, some merchants have not opened sales services to remote areas, and some merchants will adjust the price of goods according to the location of consumers to cover logistics.

For transit orders in remote areas, merchants only need to send the order to the transit warehouse, and the transit warehouse will be shipped to Xinjiang, Tibet, Gansu, Ningxia, Inner Mongolia and other remote areas for the second time, all of which will be borne by the platform. At present, this new reduction measure has covered all merchants on the Pinduoduo platform. Industry analysts believe that this move is good for reducing consumer consumption costs and business sales costs.

Another big investment for merchants is on the advertising and marketing side. Chen Caibin told reporters that in the process of product sales, merchants usually carry out advertising and promotion, which will incur certain promotion costs. However, after seeing the advertisement, consumers may choose to refund for various reasons. In this case, even though the consumer didn't complete the purchase, the merchant actually spent the promotion fee for the transaction.

Now, Pinduoduo has launched the "Promotion Service Fee Refund Right" to merchants, and the platform will automatically return the promotion red envelope corresponding to the amount of the merchant's promotion software service fee for the consumer's fully refunded order before delivery, and the merchant does not need to initiate an appeal.

"For us, this change has a big impact." Chen Caibin calculated an account with reporters, and in the past ten days, the promotion fee has basically returned three to four points.

"According to the current monthly promotion fee of about 600,000 yuan, according to the current preferential policy, the promotion fee of about 20,000 yuan can be returned." Chen Caibin said.

Based on his own business situation, he calculates that after the implementation of several reform policies, the total cost can be reduced by about 0.2%. That's not a small amount for a large seller.

Build a business ecosystem

Pinduoduo's subsidies have really reduced the financial pressure on merchants, especially in the highly competitive e-commerce market, where a healthy merchant ecosystem is the key to the sustainable development of the platform.

In order to further optimize the experience of merchants, Pinduoduo has also upgraded the after-sales service system of merchants, opened a green channel, and established a special after-sales service team to fully support merchants to appeal abnormal orders, malicious complaint orders, and negative consumer experience orders.

At the same time, Pinduoduo has also made special adjustments to the appeal service for after-sales disputes of merchants, and there is no longer a limit to the number of times that can be appealed. This new benefit is currently in initial testing and is expected to cover all merchants in the near future.

Chen Caibin said that in the past, consumers put forward demands, and the platform intervention will directly refund consumers, if the order is unreasonable, the merchant needs to appeal to the platform, but the number of complaints is very limited, "We have tens of thousands of orders a month, and after-sales account for about 2%, but the number of complaints is only ten."

This change is also very important in Chen Caibin's view, which is undoubtedly the protection of platform merchants. Industry analysts believe that both merchants within the platform and external merchants will enhance some trust in the platform of Pinduoduo.

This is related to Pinduoduo's development strategy.

Over the past year or so, Pinduoduo has firmly deepened its high-quality development strategy, gradually established and implemented the "10 billion ecology" project, tilted resources towards high-quality merchants and commodities, promoted small and medium-sized enterprises and high-quality merchants to achieve high-quality growth, and improved the overall service efficiency and quality of platform merchants.

Pinduoduo is also attracting more brand merchants to enter the game. Its data shows that among the new businesses with tens of billions of subsidies, the number of agricultural products merchants increased by 83% year-on-year, the number of digital home appliances merchants increased by 86% year-on-year, and the number of beauty merchants increased by 105% year-on-year.

At the second quarter of 2024 earnings conference, Chen Lei said that Pinduoduo's high-quality development will enter a new stage, and the next step will be to continue to build a healthy and sustainable platform ecology through "strong support" and "resolute governance".

Continuing to invest in the platform ecology and reducing tens of billions of handling fees means that future revenue and profits will be affected, but Pinduoduo still firmly chooses long-term investment.

For Pinduoduo, it is moving towards a more diversified and high-quality e-commerce platform. With the deepening of the branding strategy, Pinduoduo is expected to achieve long-term development in the field of e-commerce.

In an interview with the 21st Century Business Herald, Mo Daiqing, director of the online retail department of the E-commerce Research Center of the Network Economic Society, believes that the cost reduction strategy implemented by the Pinduoduo system has indeed reduced operating costs for merchants to a certain extent and helped to enhance their profitability. However, whether these measures can be translated into actual revenue growth for merchants is also affected by the effectiveness of the merchants' own business strategies and the complex and changeable market environment.

In the face of these cost reduction measures, merchants should take a positive attitude and make full use of the cost advantages they bring, while further optimizing their business strategies and focusing on improving product quality and service levels to attract more consumers and promote sales growth. In addition, merchants also need to maintain a keen observation of market dynamics, and keep abreast of market trends, competitors' strategic adjustments and other information, so as to respond flexibly and ensure the effectiveness and competitiveness of business strategies.

(Author: Dong Jingyi Editor: Zhang Weixian)