A Note on Disruptive Innovation Model of PDD Case

Abstract

Pinduoduo e-commerce platform (NASDAQ: PDD) is a typical latecomer related with disruptive innovation. When Pinduoduo entered China’s e-commerce field in 2015, it already had various e-commerce platforms such as Taobao and others, among which Taobao and Jingdong had a market share of more than 90%. Pinduoduo was facing the market competition situation of oligopoly. Second, Pinduoduo is an undisputed disruptor of the market. Pinduoduo adopts distributed AI technology that is different from other e-commerce companies. It starts from the low-end market with the Pinduoduo mode and develops a lowend market of e-commerce with more than 300 million users in just three years by relying on low-cost commodities [1-3]. At present, the market coverage of Pinduoduo has gradually expanded from the early low-end consumer groups to the middle and high-end consumer groups, with the characteristics of disruptive innovation from the non-mainstream market to the mainstream market; Thirdly, the company of Pinduoduo is registered and operated in mainland China, which is convenient for researchers to observe. More importantly, Pinduoduo successfully launched in the US in July 2018, making its public data more accessible to researchers. Finally, in the e-commerce industry, Taobao (for the first time) took 5 years to go public and Jingdong took 10 years. However, only three years, Pinduoduo successfully landed on NASDAQ in the United States with 344 million active buyers and became the third largest e-commerce company in China after Alibaba and Jingdong. Pinduoduo is a successful business case in the digital age, so how to use business theory to analyze this case? We believe that disruptive models of innovation are good.