JD.com and Taobao are all gone, why is Pinduoduo indifferent to instant retail?

Although the instant retail market has reached trillions and is still growing rapidly, Pinduoduo is facing many challenges: insufficient logistics and distribution capabilities, misalignment between user groups and instant retail demand, declining core business profits, and setbacks in overseas business…… All kinds of difficulties make Pinduoduo seem to be struggling on this track. However, the sinking market may provide a glimmer of hope for Pinduoduo. Can Pinduoduo rely on its roots in the sinking market to find a new breakthrough in instant retail? Can Huang Zheng’s return bring a new turn for Pinduoduo?

JD.com delivered in 9 minutes at the earliest, Taobao flash sale live broadcast room goods arrived at home immediately, and Meituan Lightning Warehouse delivered urgently needed goods at two o’clock in the morning. In another e-commerce giant, Pinduoduo, a single product delivered in the same city cannot be found.

This year’s 618, China’s e-commerce battlefield is full of gunpowder, but the smell of gunpowder has changed. JD.com launched a high-profile “second delivery” on the main station, Taobao pushed “flash sales”, and Meituan officially announced its participation in the 618 war – the three giants have invariably pushed instant retail to the C position.

Relevant data show that China’s instant retail scale will reach 1,000 billion yuan in 2025, continuing to maintain double-digit growth, and is expected to exceed the 2 trillion mark in 2030. In this market with an increase of more than one trillion yuan, as an e-commerce giant, Pinduoduo’s absence is particularly reverie.

Distribution shortcomings: Pinduoduo’s difficult “last mile” dilemma

The Tiger Sniff Commercial Consumption Group once disclosed an intriguing detail: in the first quarter of this year, Liu Qiangdong invited Cheng Wei, Wang Xing and Yao Jinbo to drink and gave a dose of competitive prevention in advance. Surprisingly, even 58.com and Didi are on guard, but Pinduoduo is not considered.

The reason is straightforward – the industry generally believes that it is difficult for Pinduoduo to pull up an instant delivery team in the short term. This judgment point hit Pinduoduo’s lifeline for entering instant retail.

In the realm of instant retail, the “minute-level delivery” capability is the ticket. Meituan has a network of 7.45 million riders, JD.com has a Dada logistics system, and Alibaba has an Ele.me distribution team. Pinduoduo has long adhered to the principle of “the platform does not touch the goods” and outsourced logistics to third parties such as J&T and Three Links and One Delivery.

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Pinduoduo is not completely without trying. As early as 2022, it is recruiting fruit, flower, and cake category merchants with 24-hour delivery capabilities in Beijing, Shanghai, Guangzhou and Shenzhen. Its Duoduo grocery shopping business also once tested the waters of express collection, and later changed its name to Pinduoduo Station, supporting 24-hour self-service pickup and door-to-door delivery.

But these layouts are far from true instant retail. Duoduo grocery shopping can only achieve “next-day delivery”, which is not competitive in the context of Meituan’s popularization of “hourly delivery”. A logistician who buys groceries said frankly to Mr. Liu: “The order volume is not bad, but the distribution cost is low, and the cost is compressed in every link, and many logistics providers are losing money.” ”

User misalignment: the contradiction between the sinking market gene and the main battlefield of instant retail

Another dilemma for Pinduoduo is user matching. The main battlefield of instant retail is concentrated in first- and second-tier cities, serving mid-to-high-end customers who pursue “fast” and “good”; Pinduoduo’s basic market is a price-sensitive sinking market user.

Huang Zheng once explained Pinduoduo’s positioning: “It pays attention to the largest number of people in China.” The mobile Internet allows the vast majority of Chinese people to have the same information acquisition and transaction ability as first-tier cities. This positioning has made Pinduoduo’s rise but has become an obstacle to its entry into instant retail.

When Pinduoduo tried to cut into instant retail, it found itself lacking partnerships with offline merchants in first- and second-tier cities. Local business resources such as fruit shops, pastry shops, and flower shops need to be established from scratch. The low-price-oriented product structure on the Pinduoduo platform has a natural contradiction with the high-quality demand of instant retail.

This dislocation was already evident when Pinduoduo launched “Duoduo Grocery Shopping” in 2020. Despite the transfer of one-third of its employees (more than 2,000 people) to the business, the usual approach of low-price subsidies has completely failed in the instant retail sector. In the end, the topic of “Duoduo grocery shopping local life business has been completely suspended” rushed to the hot search in 2024.

Multiple challenges: internal and external difficulties such as declining profits and setbacks in overseas business

Pinduoduo has no time to take care of instant retail at the moment, and the more direct reason is that its core business is facing severe challenges. According to the financial report for the first quarter of 2025, Pinduoduo’s operating profit fell by 38% year-on-year, and the net profit attributable to the parent company plummeted by 47%, which is a rare decline in profit in recent years.

At the same time, Pinduoduo’s overseas business Temu suffered a heavy blow. Since May 2, the Trump administration has canceled duty-free treatment for small imports from China, and Temu has borne the brunt. CITIC Securities calculates that the price of a commodity with an original price of $40 under the new policy will increase by a quarter.

Temu’s predicament has hit Pinduoduo hard. As Pinduoduo’s second growth curve, Temu has entered 48 countries, but the US market still accounts for 35%. Pinduoduo will invest 111.3 billion yuan in sales and marketing expenses in 2024, mainly for Temu’s overseas marketing.

Domestically, Pinduoduo’s business relations have also turned on a red light. In July 2024, more than 200 Temu merchants besieged Pinduoduo’s Guangzhou headquarters to protest the platform’s seizure of about 138 million yuan. Although Pinduoduo subsequently launched the “100 billion support” plan, the reconstruction of merchant trust is by no means an overnight achievement.

Giant barriers: The high threshold of the instant retail track has been achieved

When Pinduoduo was in trouble, the pioneers of instant retail had built an insurmountable moat. Meituan Flash Sale has reached cooperation with more than 5,600 large chain retailers, 410,000 local small merchants and more than 570 brands. Meituan’s delivery cost has dropped to 4.1 yuan per order.

More importantly, Meituan’s technological leadership is more than one position. In 2025, Meituan will compress the instant retail fulfillment timeline to less than 28 minutes through an intelligent distribution matrix composed of drones + unmanned vehicles, and achieve millisecond-level dismantling of 3,000 orders per second during the peak period of the AI scheduling system.

JD.com relies on strong logistics genes to integrate takeaway and “hourly delivery” in the whole scenario. Although its takeaway team has just started, it has great development potential with the support of JD.com’s logistics system. Alibaba integrates Taobao flash sales and Ele.me to form ecological synergy advantages.

Instant retail has entered the stage of “microsecond” efficiency competition. Meituan’s average daily order volume exceeded 18 million, accounting for the vast majority of the market share; JD Daojia and Ele.me non-meal business followed. Douyin’s “Hourly Delivery” relies on the live broadcast e-commerce ecosystem, and the GMV of local life has exceeded 560 billion yuan in 2024.

Sinking blue ocean: Pinduoduo’s possible misaligned competition opportunities?

Despite many obstacles, the sinking market of instant retail may leave a glimmer of hope for Pinduoduo. According to the iiMedia Consulting report, the number of instant logistics users in China will reach 799 million in 2024 and is expected to exceed 1 billion in 2030, and the sinking market instant delivery services will usher in an important period of opportunity.

According to data from the Research Institute of the Ministry of Commerce, the scale of county-level instant retail sales will reach 150 billion yuan in 2023, a year-on-year increase of 23.42%, accounting for 23.08% of the total scale of instant retail. From January to August 2024, Meituan’s instant retail orders in sinking markets such as counties increased by 54% year-on-year.

This is surprisingly similar to the sinking trend of e-commerce when Pinduoduo started. In 2023, the State Council clearly proposed to “comprehensively promote the construction of the county-level business system and vigorously develop new models such as common distribution and instant retail”, with a clear policy orientation.

If Pinduoduo can replicate the successful experience of “rural encirclement of cities” to the field of instant retail, using its user base and merchant resources in the sinking market, combined with the community contacts accumulated by Duoduo grocery shopping, it may be able to find a breakthrough in the county instant retail market.

The return of the founder: Can Huang Zheng be the key to Pinduoduo’s breakthrough?

Faced with the strategic dilemma of instant retail, the industry began to call for Huang Zheng’s return. Jack Ma’s reappearance injected confidence into Alibaba, and Liu Qiangdong’s return made JD.com the most popular company in the first quarter. In contrast, Huang Zheng, who is only in his 40s, is far from the spotlight.

In a letter to shareholders in 2021, Huang Zheng said that he wanted to do research in the fields of food science and life sciences. But at a critical moment for Pinduoduo, the capital market and employees are looking forward to his return. An observer pointed out: “Huang Zheng’s return will be a reassurance, just like Liang Jianzhang to Ctrip, which can not only do research, but also escort major strategies.” ”

Pinduoduo’s current strategy seems to be more inclined to “defend the city” rather than “expand the territory”. After canceling the “refund only” policy, the “100 billion support” plan was launched to appease merchants; Faced with Temu’s dilemma, it seeks market growth outside the United States. But these measures are difficult to solve Pinduoduo’s long-term growth anxiety.

Huang Zheng once said: “We are all products of the times, and the situation is stronger than people.” In the general environment, we happen to be in this place, so we do our duty and do what we should do. At the moment when instant retail is reconstructing the e-commerce pattern, what is Pinduoduo’s “duty”? The answer may need to be written by Huang Zheng himself.

Between the door-to-door delivery of the post station and the real hourly delivery, there is an insurmountable gap for Pinduoduo. In the first quarter of this year, when JD.com’s takeaway orders surged in the marketing of Liu Qiangdong’s personal delivery, and Meituan’s drone compressed the delivery time to less than 28 minutes, Pinduoduo’s silence was deafening.

Logistics shortcomings are difficult to make up, user market misalignment is difficult to solve, and overseas backyards are frequently on fire – Pinduoduo has 364.5 billion cash but has nowhere to bet. Today, when traditional e-commerce giants have transformed into instant retail players, Pinduoduo, which once disrupted the industry, is looking for its next battlefield.