· Agricultural product GMV surged 109% on PDD in 2019
· Biggest group of fruit buyers on PDD are aged 20–30
Pinduoduo Inc. (PDD) doubled the sales of agricultural products through its e-commerce platform last year, cementing its position as the leader in the category as more consumers embraced the convenience of buying their vegetables and meat online. Consumers placed 136.4 billion yuan worth of agricultural product orders in 2019, up 109% from the year before, through Nasdaq-listed PDD. The number of annual active buyers of agricultural produce surged 174% to 240 million, while active merchants climbed 142% to 586,000, according to a report released by PDD.
Many consumers have traditionally preferred to buy their fresh food by shopping at wet markets or supermarkets, but online sales have boomed in recent years because of the convenience of e-commerce, which offers a far wider range carried by the neighborhood vegetable and fruit vendor, butcher or fishmonger.
The figures from 2019 do not account for the uptick in usage of online channels to buy produce during the coronavirus outbreak, when millions of people were ordered to stay at home and could not do their grocery shopping like they used to offline.
“Daily new users to major fresh food e-commerce and online to offline platforms have increased by 50% to 200% on a year-on-year growth,” said Jialu Shan, researcher at IMD Switzerland, referring to the impact of COVID-19 on consumption patterns in China. “I think in the long run, some consumers may return to their old buying habits as China has now started to reopen its wet markets. However, it is likely that many, especially young and middle income groups, will continue to purchase fresh food online.”
Some interesting facts from 2019:
· Australian steak, Chilean cherries and Thai durians were among the most popular imported agricultural products on PDD last year.
· More consumers from smaller cities are buying imported fruit, driving the 402% increase in category sales including Mexican avocados and Vietnamese green mangoes.
· The average fruit buyer on PDD — defined as someone who has purchased at least three times — bought 63.5 kilograms worth last year through the platform, almost double that of the national average.
· Fruit buyers on PDD are young — the biggest group are aged 20–30 and account for nearly 52% of order volume.
· Fresh vegetable sales rose 150% in 2019 on PDD, led by pumpkins, tomatoes and chilis.
· Rice, flour and mixed grains also saw a 398% increase in sales on the platform.
· Sales and orders of fresh meat and meat products gained 370% in 2019.
· More than 17 million urban consumers have bought plants through PDD
E-commerce not only offers convenience to consumers, it also helps boost farming incomes by connecting producers directly with end-buyers.
Last year, sales from impoverished counties rose 130% to 37.3 billion yuan, Of this, the number of merchants from poverty-stricken areas climbed 540% to 157,152, while their annual orders jumped 413% to 4.8 billion yuan, as PDD data shows.
PDD committed 15.9 billion yuan in sales and marketing resources last year and extended 2.9 billion yuan in cash subsidies to help boost incomes.
By aggregating demand through the “team purchase” model — where two or more buyers can team up to get a better price — PDD has helped connect the country’s farmers to a larger pool of end consumers, breaking the previous limitations of scale and market size.
It isn’t just the residents of big cities that are buying on PDD. The farmers themselves are increasingly turning to e-commerce to source for their essential needs.
As of end-2019, more than 1.6 million agricultural producers purchased farming equipment and resources through PDD. The value of sales of farming equipment like surged 1145%, while fertilizer sales gained 1397%.