In the new decade, Pinduoduo will spend heavily on upholding long-termism.

Is Pinduoduo a long-termist company?

The executives gave a positive answer. On the night the Q2 financial report was released, Zhao Jiazhen, co-founder of Pinduoduo, said: "This year marks the start of Pinduoduo's second decade, and it is also a key year after I took over as chairman to launch the overall reshaping of the company's organization and culture around 'high-quality development in the new decade'."

This is not empty talk. Let's take a look at what Pinduoduo has done in the past few quarters: actively promoting platform governance, continuously increasing investment in the "100 Billion Support" initiative, and its cross-border business Temu quickly adjusted its strategy to adapt to the new global trade environment.

To this end, Pinduoduo has not hesitated to make substantial trade-offs, which has put pressure on its profits. In Q2, Pinduoduo's total revenue reached 112.358 billion yuan, a year-on-year increase of 8%; however, the net profit attributable to common shareholders decreased by 12% year-on-year. But this has not shaken its determination to continue investing at all. In Q2, R&D expenses increased by 40% year-on-year, and the growth rate of operating expenses was also significantly higher than the revenue growth rate.

In response, Zhao Jiazhen explained at the financial report meeting that the decline in profits mainly stemmed from a series of continuous investments in the platform and the industrial ecosystem, and these investments affected the performance of this quarter to a certain extent.

Obviously, this leading e-commerce player, which has been known for "daring to invest and daring to operate at a loss" since its inception, is making a new choice.

01

Pinduoduo's Self-Purification: Normalization of Platform Governance

Against the backdrop of the complex macro consumption environment, the growth logic of the e-commerce industry has also undergone great changes. In order to promote "high-quality development in the new decade", the platform has allocated more funds and resources to multiple long-term strategies such as platform governance.

Since the proposal to focus on platform governance, Pinduoduo has launched more than 150 trust and security measures in total, and launched more than 50 special initiatives in June alone, covering product listing control, food and drug safety, qualification review, advertising compliance, intellectual property rights, misleading marketing and live-streaming e-commerce specification.

Among many categories, food sold online is one of the key categories that the platform has focused on rectifying recently. On June 5, Pinduoduo issued the "Special Governance Announcement on Geographical Indication Products on the Platform", reminding merchants that if there are violations such as non-compliant product qualifications, non-standard filling of product attributes, and false publicity, the platform will take corresponding disposal measures.

Dong Jian, an origin merchant with the "Luochuan Apple" geographical indication authorization, told the media that this is actually one of the platform's measures to support high-quality merchants, allowing honest merchants who focus on quality and supply chain efficiency to gain more market opportunities and profit margins.

Obviously, in order to quickly solve the chaos in some industry categories, Pinduoduo has carried out targeted special governance for the governance team according to the characteristics of vertical categories, and implemented more than 50 special plans for subdivided fields in June alone. Zhao Jiazhen said at the financial report meeting: "We insist on building a solid compliance bottom line with institutional rigidity, reconstructing the governance logic with systematic thinking, promoting the in-depth development of ecological governance towards normalization, refinement and institutionalization, and effectively creating a safer, more standardized and more trustworthy consumption environment."

Many merchants told the media that with the implementation of new regulations such as the "Measures for the Supervision and Administration of Online Trading Platform Rules" and the "Provisions on the Supervision and Administration of Online Food Sales Operators' Implementation of the Main Responsibility for Food Safety", they clearly felt that "the platform has stricter management and higher requirements, and at the same time, the explanation of the rules and the guidance for merchants are also more detailed."

Pinduoduo has intensified its governance efforts in all dimensions. Since the beginning of this year, focusing on key areas such as merchant business qualification review, food safety, AI services and applications, minor protection, and intellectual property protection, Pinduoduo has continued to promote the normalization of ecological governance, consolidate the compliance foundation from the source, actively fulfill platform responsibilities, and effectively protect consumer rights and interests.

After the merchant submits the qualification for the operation license of geographical indication products, the relevant information will be displayed on the product details page

In addition to launching special governance measures for vertical categories, Pinduoduo has also expanded the scope of governance. Pinduoduo not only supervises "whether there is a problem with the product", but also covers the whole chain of pre-sales, in-sales and after-sales of products, and governs a whole set of behaviors of merchants and products before and after transactions on the platform.

In order to optimize the business environment, in addition to promulgating new regulations and various supervision and management measures, Pinduoduo has also made a lot of technical investments to ensure the implementation and execution of the rules. Recently, Pinduoduo has established a special company in Xiongan. The latest data shows that the company has 4000 full-time employees, and has set up a traditional industry data processing service center and a comprehensive service center for high-quality development of traditional manufacturing.

Zhao Jiazhen revealed: "Since settling in Xiongan, with the determination of long-term investment, we have continuously increased our support and investment in the Xiongan company, and made heavy investment in the Xiongan company from multiple dimensions such as fixed asset investment, recruitment of special talents, and implementation of core businesses."

02

E-commerce Needs New Growth Points, High-quality Supply Should Take the Central Stage

In the e-commerce industry where competition has become a red ocean, how can we continue to achieve growth? Pinduoduo's answer is high-quality supply.

Since the beginning of this year, Pinduoduo's "100 Billion Support" policy to benefit merchants has maintained high investment, and iteratively upgraded special actions such as "Pinduoduo's High-quality Local Specialties", "New Quality Supply" and "E-commerce Westward Expansion". Specifically, the scope of Pinduoduo's 100 billion support has extended from merchants to agricultural producing areas, industrial belts and their upstream and downstream, promoting the comprehensive upgrading of the supply chain system.

Taking agricultural products such as Guangdong lychee and Hainan pineapple as examples, under the guidance of the platform, origin merchants will introduce a "traceability code" for each order of fruit. Consumers can scan the code to view key quality data such as origin, shipper, quarantine information and inspection reports. Products have changed from relying on merchant descriptions in the past to quality information that consumers can further verify.

In order to help merchants grow, the platform also provides extremely high traffic support. Traffic products such as flash sales, 10,000-person group buying, and 10 Billion Subsidies are further tilted to high-quality products in agricultural producing areas and industrial belts, making many seasonal fruits hit products on Internet platforms.

The platform gives high-quality supply the central position, not only traffic support. According to the executives, the goal of supply chain investment should be: "We need not only to stock up goods, but also to build good roads."

First of all, it is necessary to "stock up goods". Pinduoduo has continued to help capable traditional OEMs improve their product and brand capabilities through projects such as "New Quality Supply" and "Pinduoduo's High-quality Local Specialties", promote the value leap of the supply side, and allow consumers to obtain high-quality domestic products with higher cost-effectiveness.

In addition, Pinduoduo is also continuously improving the performance chain: improving the transit network through infrastructure projects such as free shipping to villages, opening up the last-mile logistics breakpoints in remote areas, so that consumers in more regions can enjoy the convenience and benefits brought by e-commerce.

After the courier who delivers parcels to the village unloads the parcels arriving at the village, he also collects the parcels to be sent by the villagers

Zhao Jiazhen said frankly: "As the industry matures, various platforms will choose different paths based on their own capabilities and accumulation. For us, the path has always been very clear: continue to make the supply chain more solid."

In order to deeply understand the pain points and demands of merchants, various special teams of Pinduoduo have also gone deep into the front line of the industry to provide systematic support for merchants. According to reports from many media, in many industrial belts across the country, the "New Quality Supply" special team has successively entered industrial belts such as Suzhou home textiles, Shaoxing tents, Jinhua outdoor products, Guangzhou beauty, Jieyang men's clothing, and Xinyang textiles, providing systematic support for merchants in industrial belts from dimensions such as traffic exposure, data empowerment, market expansion, cost reduction, intelligent manufacturing and warehousing upgrading.

After a year of efforts, Pinduoduo's "100 Billion Support" merchant strategy is gradually moving from the investment period to the harvest period.

From the 10 billion fee reduction in 2024 to the 100 billion support launched at the beginning of last year, the platform's resource tilt and supply chain feedback in the past two years have covered major agricultural producing areas and manufacturing industrial belts. A number of merchants in industrial belts have achieved quality and efficiency leaps as a result.

These achievements can be seen not only from the words of merchants, but also from the financial report. Judging from various important data, Pinduoduo's performance in Q2 has stabilized. In this quarter, Pinduoduo's transaction service revenue reached 54.7 billion yuan, a year-on-year increase of 13%, which is much higher than the overall revenue growth rate; the online marketing revenue representing the revenue of the domestic main station increased by 3.5% year-on-year, which is an improvement over the 2.5% year-on-year growth in Q1, and significantly higher than the previous negative growth forecast of Citi and Goldman Sachs; the adjusted operating profit in Q2 increased by 5% year-on-year, which is higher than the expectations of Goldman Sachs/Citi (-4%/-9%).

Zhao Jiazhen said: "These implementation cases prove that the supply chain feedback measures are effective. The primary goal of the plan is to improve product quality, supply chain and merchant ecology, so that small and medium-sized merchants can invest the saved costs in product upgrading. In the long run, the decline of merchant operating costs, profit recovery, and enhanced business confidence will eventually drive the continuous growth of the platform's endogenous value."

03

Great Changes in Global Trade, Temu Also Has a New Look

Looking through the financial reports of many companies, we can see that unprecedented changes are taking place in cross-border e-commerce. Changes in regulations and policies have rewritten the rules and redefined what kind of products are really needed in the global consumer market now and in the future.

In the past few years, the business model of cross-border e-commerce was very simple. The platform obtained profit margins by reducing procurement costs, advertising costs and logistics costs. However, the gradual improvement of compliance requirements has impacted the old model and changed the old rules of the game. Cross-border e-commerce platforms have taken new steps one after another to turn to new models.

Chen Lei admitted frankly that after the implementation of the new policy, cross-border orders in the EU market will face problems such as reduced performance efficiency and increased operating costs, and the short-term growth of related businesses will be significantly impacted.

This is also related to the fact that Temu is already in a different stage of development. Today, Temu is already a leading player in cross-border e-commerce. Its user data once caught up with Amazon, the world's largest e-commerce platform. Its growth has been relatively stable, and its business strategy should also be adjusted appropriately. Reducing advertising investment and shifting the business focus to improving per-order efficiency and user retention is a logical move.

Building trust has become the most important thing at present. What cross-border e-commerce needs to do is no longer to export the excess supply chain caused by the epidemic, but to make up for a whole set of new business capabilities, including local warehouses, after-sales service, brand marketing, KOL content planting, content evaluation, alliance channels, media exposure, and even some overseas offline activities.

Based on this, Pinduoduo launched its self-operated business Xinpinmu, and launched its brand BEMUVO, which has been launched in countries such as Japan and Canada. At present, users can find the brand store by searching for "Bemuvo" on the homepage of the Temu App or website, and the products are directly supplied by the brand official. At present, it mainly focuses on standard products such as household goods and clothing, many of which are co-branded products with IPs (such as Batman, The Powerpuff Girls, etc.), with a wide price range, from key chains priced at less than 2 US dollars to quilt cover sets priced at 26 US dollars, continuing Pinduoduo's consistent style of "good products at affordable prices".

At the financial report meeting, the executives said that Xinpinmu is still in the early stage of development, and there is no set proportion target for self-operated and third-party businesses, nor a pricing standard. In addition, the self-operated brand is currently positioned as an extension of long-term investment in the supply chain - working closely with manufacturers who have the ability and willingness to invest in product development for a long time, and using the platform's market insight and global reach to provide certainty for brand building. At the implementation level, we will first selectively focus on core categories where the platform and supply chain have unique advantages, and cooperate with manufacturers for a long time from product planning, R&D to quality standards and market testing.

To operate self-owned business, investment in infrastructure is indispensable. Temu is undergoing a major strategic transformation, accelerating the shift from the past "fully managed + domestic direct mail" model to the "semi-managed + overseas warehouse localization" model.

Temu is vigorously building overseas warehouses: it has simultaneously launched more than a dozen self-operated warehouses in Europe (such as Germany and Poland), and promoted the self-built warehouse project in the United States. The platform's goal is to increase the proportion of local warehouse shipments at European sites to a relatively high level in the third quarter of 2026.

In response to the new trends in cross-border intellectual property rights, in July this year, Temu released the "2026 Intellectual Property Protection Report", which fully disclosed the annual intellectual property governance results. The report shows that in the past year, Temu has deeply improved the full-link intellectual property risk control system, built a three-level review mechanism of "machine intelligent review + manual fine review + brand party joint verification", and realized full-cycle risk control before, during and after product listing.

A legal professional analyzed to the media that in order to cope with the new policy, Temu is likely to launch a set of global compliance upgrade plans, including setting up a compliance center in Europe, introducing third-party commodity testing institutions, establishing stricter seller access standards, and at the same time changing some fully managed categories to semi-managed, returning part of the pricing power and after-sales responsibility to merchants, so as to prove that it is only a platform rather than a retailer. But these actions take time, 13 days is obviously not enough to implement, and it is more likely to first submit a roadmap and budget that can be accepted by the EU.

Facing the new international trade environment, Chen Lei, Chairman of Pinduoduo, said: The company's business is related to the daily lives of billions of people around the world, and there is huge room for growth, accompanied by higher responsibility expectations. Chen Lei said that the platform has built a systematic intellectual property protection capability. Recently, we have won a full victory in intellectual property litigation cases with our peers, which also confirms that this set of intellectual property protection mechanisms is effective.

In short, the tax reform policies in Europe and the United States are forcing cross