In many people’s eyes, Feng He fits the traditional definition of an elite. After graduating from university in Guangzhou, she joined a well-known foreign company to do market research and later did a stint at an investment firm.
Her decision to start a women’s fashion business on Pinduoduo, the fast-growing social e-commerce platform, at the end of 2019 raised a few eyebrows. But it was not a spur-of-the-moment move. Feng’s parents have been in the apparel business for years and know Guangzhou’s clothing scene inside out. During her time at the investment firm, Feng got to know many startups, as well as e-commerce, livestreaming, and new retailing ideas. She witnessed Viya go from being a clothing wholesaler in Guangzhou to a top livestreaming host on Taobao, an e-commerce platform operated by Alibaba.
Feng also witnessed the rapid rise of Pinduoduo, which was founded in 2015 and has garnered close to 700 million users in just five years. Confident of her prospects on the platform known for its value-for-money merchandise and interactive shopping experience, Feng quickly figured out how to differentiate herself from her peers. Within two months, her online store ranked among the top in sales in the women’s clothing category.
“I chose PDD because there were no top hosts on the platform,” Feng said. “That makes it easier for little-known anchors to get noticed.”
At the time, livestreaming on Taobao was already in full swing, and many other social and e-commerce apps also used livestreaming to sell products. According to a report by A.T. Kearney in 2018, social media users in China were more receptive to brand recommendations by online celebrities than any other country surveyed. China’s livestreaming GMV may double to 1 trillion RMB in 2020 from 2019, according to CLSA.
While the coronavirus pandemic in early 2020 dampened the consumer market, Feng saw an opportunity as the lockdown measures accelerated the online migration of shopping. During the Chinese New Year, Feng spent more time livestreaming and chatting with customers to share fashion tips, accumulating tens of thousands of followers. Feng now has more than 70,000 avid followers and the daily revenue of her store reached more than 100,000 yuan even though she livestreams for only three hours a day.
Unlike many other women's clothing businesses that adopt the fast fashion model, Feng focuses on quality and value for money. She chooses the best clothing factory in Guangzhou to partner with and selects the best quality clothes with the most time-tested styles. Although she may earn only a few yuan of profit from each piece of clothing she sells, she has built a good reputation, which has gained her many new customers through word-of-mouth. And some 80% of her customers are repeat buyers -- one customer even bought more than 40 pieces from her within a month.
Feng’s success proved that consumers do not just look for cheap products on Pinduoduo, a common misconception about the platform. During this year’s Father’s Day, she sold more than 100 pieces of Armani watches priced at more than 3,000 yuan.
"What PDD users look for is not necessarily low price, but good value-for-money," said Feng. "Everyone wants goods of higher quality, and only if the merchandise you sell are superior can you stay in business longer and grow bigger."
Her next step is to expand her team and gradually lengthen the duration of livestreaming, while increasing the range of products.
“Everyone has a need for upgrading their consumption,” Feng said. “On Pinduoduo, I can push the value-for-money proposition of Guangzhou’s women’s fashion to the extreme and use livestreaming to let consumers from the entire country to buy the best clothes at the best price.”