One of the key uncertainties a farmer faces is how much demand there is for his produce, which determines the price for it.
Historically, wholesalers and distributors have captured a greater proportion of the value in the supply chain for their role in matching supply with demand. They had much greater leverage over smallholder farmers, who comprise most of China’s farming industry. This lack of transparency and pricing power limits the ability of farmers to reinvest in their farms. It also dims the attractiveness of being a farmer.
However, this is changing in the age of e-commerce and growing internet penetration. Pinduoduo has applied its innovative pin model of aggregating demand through team purchases to make it possible for more farmers to tap into the online market for agricultural produce
Firstly, by doing away with unnecessary intermediaries, farmers can offer prices that are lower than what consumers are used to paying at retail, and still net a higher profit than they would otherwise fetch selling through conventional distributors. Secondly, Pinduoduo can actively push agricultural produce on the relevant users’ recommendation feeds, such that users are able to discover fresh and affordable produce. By sharing these finds with their friends to form team purchases, they in turn help drive more volume with greater visibility to the farmers. This is especially useful for produce that is in over-supply or needs to be sold quickly to maintain their freshness.
From Day 1, Pinduoduo has broken down the artificial barriers between farmers and consumers and enabled farmers to reap the benefits of e-commerce and economic digitalization. We do this by connecting farmers to consumers directly through our platform.
As a result, farmers benefit by having more distribution to a wider market, while consumers across a wide economic and social spectrum benefit from having more choices at more affordable prices. With stable and higher incomes, farmers have greater freedom to plan and make necessary investments. Store listings by farmers from impoverished regions are also routinely featured on our Duo Duo Orchard mini game, which boasts over 60 million daily active users. The fruits given out through the game are also sourced from impoverished regions, and this notion of supporting farmers through their shopping activity on our platform has become normalized for most of our users.
The benefits to these rural communities also extend beyond farmers simply shifting their distribution channels from offline to online. By enabling farmers to become entrepreneurs and take greater control over their sales, new jobs are being created. For instance, a range of agriculture-based new logistics and new industry infrastructure, including packaging, warehousing, and shipping, has sprung up to keep up with the influx of demand from consumers through the Pinduoduo platform. In rural areas in Central and West China, small, efficient, and flexible village-level packaging and warehousing sites have emerged, creating jobs and income for some of the previously