Pinduoduo Inc., China’s largest agriculture platform, doubled the value of agricultural orders it handled last year, exceeding the company’s earlier estimate as the pandemic pushed more people to order food and groceries online.
The Nasdaq-listed company recorded more than 270 billion yuan ($42 billion) in agriculture-related GMV in 2020, up from 136 billion yuan in 2019. The firm had said last December it was on track to hit 250 billion yuan in GMV for the category.
Sales were helped in part by the pandemic, which pushed more producers to seek alternatives to traditional wholesale channels. Lockdown restrictions pushed consumers to embrace digital offerings.
Pinduoduo has focused on agriculture since its establishment in 2015, transforming the way food is grown, transported and sold by connecting more than 12 million farmers directly to a user base of 731 million consumers. The company was recognized earlier this month by the central government for its work alleviating rural poverty.
“Agricultural produce is our bread and butter and making groceries affordable and available to our 731 million consumers wherever they are, whenever they want, is our calling,” said Chen Lei, Chief Executive Officer of Pinduoduo. “Digital agriculture increases the efficiency of the food supply chain and safeguards food security at the same time. We’re just at the beginning of the digital revolution in agriculture and are glad that we're making progress every day.”
Last year, as Covid-19 disrupted food supply chains and threatened farmer livelihoods, Pinduoduo held livestreaming sessions with poverty-stricken farming communities to promote their agricultural products and created a dedicated “Help the Farmers” channel to showcase fresh produce from affected areas.
The company has applied its pioneering team purchase model to bring economies of scale to smallholder farms, by aggregating scattered consumer interest into sizable, coordinated demand. Connecting sellers directly with such demand helps eliminate added costs and wastage due to unsold food.
In August 2020, Pinduoduo introduced Duo Duo Grocery, its next-day pickup service, to help local farmers sell directly to local consumers.
Orders placed before 11 p.m. are fulfilled by local farms and dropped off at designated collection points by 4 p.m. the following day, providing consumers a more economical option to premium same-day delivery services.
Pinduoduo raised $6.1 billion in November 2020 to strengthen its balance sheet and make strategic investments. The company is investing in creating a logistics infrastructure that is more suited to handling perishables. It is also investing in upstream agri-food technology that can help raise agricultural productivity and quality.
The company is actively evaluating global investment opportunities in areas including alternative proteins, food safety and precision farming.