Analysis of Pinduoduo's Social E-Commerce Model-Balancing Brand

Building and Consumer Trust

Youran Song

School of Management, Wuhan Textile University,

No.1 Sunshine Avenue, Jiangxia District, Wuhan, Hubei Province, China

Keywords: (GMV) Ecommerce, Brand Building, Consumer Trust, Pinduoduo, Globalization Strategy.

Abstract: In recent years, the rise of social media and mobile internet has given birth to social e-commerce. Pinduoduo

is the typical enterprise of social e-commerce in China and has drawn a lot of interest because of the special

"group buying" model and social viral strategy of this kind of enterprise. Pinduoduo as the research object of

this essay is the one in which Pinduodu aims to examine the method of determining which way to strike a

balance between the building of the brand and the level of consumer trust in the process of increasing the

global market in order to attain sustainable development. Using a variety of case studies, literature reviews,

and data statistics, the paper systematically reviews Pinduoduo's social e-commerce operation mechanism,

which includes the brand positioning strategy and user trust development methods. The study concluded that

by successfully enhancing consumer pleasure and brand knowledge via regional operations, optimizing user

experience, and establishing trust systems, Pinduoduo entered the foreign market to increase consumer

pleasure. Furthermore, by utilizing the UGC and social media content marketing of Pinduoduo to foster a

sense of connection with customers, the company has been actively utilizing these technologies to its brand

communication.

1 INTRODUCTION

The social e-commerce industry was one of the main

factors in the e-commerce business and it was quickly

developing in the world in recent years, and it has also

grown in importance in the area thanks to the

characteristics of cheap cost, high efficiency,

decentralization and other aspects of the mobile

Internet and social media industry that are currently

driving the world to grow quickly and with more than

5.5 billion users in the world, it has shown enormous

growth potential in terms of statistics from the year

2024 that the global market of social e-commerce has

exceeded$1.2 trillion, with more than 5.51 billion

people in total.(Figure 1)is the example of the social

e-commerce that Pinduoduo was able to achieve great

success in the domestic market thanks to the brand of

its distinctive social marketing strategy and "group

buying" model. Its gross product (GMV) in2024

exceeded US$1 billion in sales annually and had to

deal with problems in the global market (Wang,

2021). How to achieve a balance between consumer

https://orcid.org/0009-0008-4602-7774

trust and the building of brands has grown in order to

accomplish sustainable development in the

international market.

As a representative of social e-commerce,

Pinduoduo has achieved great success in the domestic

market with its unique "group buying" model and

social viral strategy. However, in the process of

globalization, how to shape a unique brand image in

the fierce international competition and win

consumers' trust through high-quality products and

services has become the core challenge it faces. While

absorbing the development experience of other

platforms, Pinduoduo also needs to recognize that the

key to its sustainable development lies in how to

balance cultural differences and market

characteristics in the international market by

optimizing product quality, platform rules and user

experience to win consumer trust. The analysis and

research in this article will help Pinduoduo achieve

sustainable development in the global market and

provide new ideas for social e-commerce enterprises

to build brand value in the process of globalization.

Song, Y.

Analysis of Pinduoduo’s Social E-Commerce Model-Balancing Brand Building and Consumer Trust.

DOI: 10.5220/0013848700004719

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on E-commerce and Modern Logistics (ICEML 2025), pages 519-525

ISBN: 978-989-758-775-7

519

Data source: Annual Reports PDD Holdings

Figure 1: Pinduoduo’s revenue from transaction services and online marketing services in the last nine quarters.

2 THEORY AND PRACTICE OF

THE SOCIAL E-COMMER

MODEL

2.1 Definition and Characteristics of

Social E-Commerce

Social e-commerce is an emerging e-commerce

model that relies mainly on social networks to drive

its operation. This model interacts with users through

social platforms, closely integrating social

relationships with business transactions. It has three

main characteristics: social network-driven, user-

generated content (UGC), and viral spread (Xiang,

2016). The development of social e-commerce relies

on the user relationship network of social platforms,

which means the user growth and product

dissemination can be achieved through friend

recommendations or social sharing. As shown in

Figure 2, the number of users of social e-commerce

in China reached 1.2 billion in 2023, up 20 percent

year-on-year, demonstrating the strong momentum of

social e-commerce in terms of user growth.

The quick distribution of material is one of the

main reasons why social e-commerce is different

from that of traditional e-commerce. The network is

used by the social media platform to spread product

information at an exponential rate and draw in more

possible users (Wang, 2021). Social e-commerce has

improved user stickiness and brand identity in

addition to being a feature of community-based

operation and individualized suggestions. This

approach has changed the way that people are

shopping, but it also changed how people and brands,

as well as how consumers and platforms are

integrated, has helped to inject new energy into the e-

commerce business.

2.2 Pinduoduo's Social E-Commerce

Model

Pinduoduo's social e-commerce model combines

social networks with e-commerce platforms to build

a shopping ecosystem based on users' social

relationships, with the "group buying" model, social

viral growth and price advantage at its core. Users can

purchase goods at lower prices by initiating group

buying or participating in others' group buying and

attract a large number of users to participate by

spreading product information in WeChat Moments

and WeChat groups, transforming shopping behavior

into social interaction to achieve explosive growth of

users (Li et al., 2020).

221.7

230.5

215.1

272

237.9

314.4

355

398.2

376.4

522.8

688.4

888.8

970.6

993.5

141.1

160.8

147.5

184.3

181.6

252.2

284.8

310.2

272.4

379.3

396.9

486.8

487.3

493.5

29.3

30.1

34.8

47.2

55.9

62.2

70.2

103.9

143.5

291.5

402.1

443.6

500

21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 24Q1 24Q2 24Q3

QUARTERLY REVENUE, ONLINE MARKETING,

AND TRANSACTION SERVICE FEES

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Data Source: https://www.199it.com/archives/1718242.html

Figure 2: The percentage of Chinese Internet user base and the percentage of Internet users who were purchased online by

the years.

Pinduoduo's social e-commerce model uses group

buying, social viral growth, and price advantages to

create an affordable and efficient shopping platform,

which is how it combines social interactions with

company transactions (Wang and Wang, 2019). This

model changed user purchasing behavior in the same

way that it also offered fresh perspectives for the

growth of social e-commerce, which has become one

of the key advice in the domestic e-commerce

industry (Weng et al., 2023).

2.3 Characteristics and Challenges of

the Globalized Market

A diversely complicated commercial environment

makes the international market a heterogeneous and

complicated one. Customers are grouped into several

national and regional groupings with a particular

cultural background as well as a variety of

consumption activities and morals. Asian markets

normally support worth for money and usefulness,

whereas the Western marketplaces mostly place more

strong emphasis on brand and customization than the

rest of the take (Wang and Ni, 2014) these cultural

differences immediately affect the way Social Eco E

Markets advertise themselves and how organizations

run.

Social networking giants and e-commerce sites

have developed in different areas, creating their own

distinctive, fierce competitive environment. Finding a

way to operate in a global market that is appropriate

for the needs of local customers is a huge difficulty for

the social e-commerce model. Pinduoduo needs to

think about how to balance the "group buying" model

with the purchasing habits of local consumers when

entering the global market. Social e-commerce

platforms must create distinctive operating plans

based on consumer behavior and social platform tastes

in various places. An important problem that the social

e-commerce paradigm must solve is how to balance

price advantage with brand building in the global

market (Li et al., 2024).

3 CONSTRUCTION & THREATS

OF BRAND BUIDING AND

CONSUMER TRUST

The core components of brand building are brand

positioning, brand image, brand value and brand

loyalty. How to clearly describe the brand's position

in the market and target audience and illustrate the

main features of the brand through differentiation

methods needs defining the brand positioning. Brand

image is the whole perception and impression that

people have of a brand, including visual symbols,

brand story and emotional connections. Brand value

is the actual benefit and emotional value that can be

given to consumers. Brand loyalty is the long-term

help and trust that consumers have in a brand (Wei,

2024). Only by strictly controlling these core features

will enterprises create a high brand effects and

balance brand building and customer trust.

5.33

6.1

7.1

7.82

8.32

8.46

9.04

9.73

0.00

20.00

40.00

60.00

80.00

100.00

2017 2018 2019 2020 2021 2022 2023 2024

Online shopping user scale in China and proportion

of Internet users

Size of online shopping users in China（billion）

proportion of Internet users

Analysis of Pinduoduo’s Social E-Commerce Model-Balancing Brand Building and Consumer Trust

521

3.1 Building and Challenges of

Consumer Trust

The building mechanism of consumer trust is a

complex and multilevel process involving consumers'

full recognition of the brand, product, platform and

overall service. The quality of products and services is

the foundation of consumer trust. Only products that

truly meet the needs and have reliable quality can win

the initial trust of consumers (Greiner and Wang,

2010). After the goods and services are up to standard,

consumers tend to select brands with a very long

history. A good reputation and keep their promises. In

the process of choosing products on the platform,

users can quickly learn about the actual experience of

the goods and services with the help of actual user

input, thereby influencing their purchasing decisions.

Finally, trust in the platform should not be neglected.

A secure transparent and effective platform can give

customers good shopping experience and further

strengthen their trust. Under the combined effect of

these elements, consumer trust is gradually

established and continuously deepened, ultimately

forming a long-term reliance and support for the brand

and the platform.

User reviews indicate that Pinduoduo was able to

recruit a lot of customers. Especially those from

lower-tier markets, through social viral and group-

buying models. Its "social + e-commerce" model has

to some extent enhanced users' trust, and its relatively

affordable product prices have also attracted price-

sensitive consumers, earning it a broad user base.

However, Pinduoduo has some shortcomings in terms

of consumer trust. Some users have doubts about the

quality and authenticity of the products on the

platform. Despite Pinduoduo's after-sales guarantee

policies such as "five times compensation for fake

products", some consumers have reported that the

products do not match the descriptions, and some low-

priced products have quality problems. Therefore, the

enforcement and transparency of the platform rules

need to be improved. Some users believe that

Pinduoduo's low efficiency in handling after-sales

disputes affects the consumer experience, which to

some extent limits the enhancement of brand value.

3.2 The Interaction Between Brand

and Trust

Brand building is the foundation for the formation of

consumer trust. Through a clear brand positioning, a

distinct brand image and unique product value, a

brand can convey a clear value proposition to

consumers, thereby establishing an initial sense of

trust. When consumers have trust in the brand, they

are more willing to continue purchasing the brand's

products and attract more potential consumers through

word-of-mouth promotion, thereby improving the

market impact and brand value (Sahin et al., 2011).

When a brand has enough consumer trust, it can also

enhance the brand's resilience, and even in a highly

competitive market environment, consumers are more

likely to choose the brand they trust. Brands earn trust

through high-quality products and services, and trust

further boosts brand value and ultimately achieves

brand sustainability.

4 STRATEGIES THAT BALANCE

BRAND BUILDING

CONSUMER TRUST

The enhancement of brand value and the building of

consumer trust are mutually reinforcing and

complementary. The enhancement of brand value is

an important foundation for consumer trust. A

company with a strong brand value can usually build

consumers' perception and favorability towards its

brand through a clear brand positioning, a consistent

brand image and quality products and services. The

Apple brand has established a deep emotional

connection with consumers by conveying the core

concept of "innovation and ultimate experience". Not

only does it give consumers confidence in the quality

of Apple products, but it also gains strong recognition

of its brand culture and helps the company win long-

term support from consumers(Sohaib et al,

2022).Building consumer trust requires enterprises to

fulfill their brand promises through practical actions

including providing high-quality products,

transparent communication mechanisms, efficient

after-sales service and responsible social behavior,

while the synergy mechanism between brand building

and consumer trust requires enterprises to maintain

consistency in brand communication and user

experience, whether online or offline. The core values

and commitments of the brand should avoid a crisis

of consumer trust caused by inconsistent information.

4.1 Case Study and Statistical Research

on Pinduoduo's Globalization

Strategy

The goal of Pinduoduo optimization in the global

strategy of the company must center on the

cooperative mechanism of brand development and

the level of trust among customers. Through the

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regional operation of the enterprise to improve the

competitiveness of the market, which will eventually

build the competitiveness of the global market, it will

gradually build the competitiveness of market

competition, which will ultimately improve the level

of competitiveness in the market. When Pinduoduo

entered the global marketing business, it can

cooperate with the e-commerce platform of the local

people to introduce product categories favored by the

domestic consumer, and then put the logistics system

to pay and pay, so that the customer ’ s attention to

the market is gradually improved, which will help

Pinduoduo to ensure the smoothness of the user’ s

experience, so as to promote the product category of

Pinduoduo in the local market to better integrate with

the domestic culture, so that Pinduodou can enhance

the level of competitiveness of the market. Which in

turn can promote the development and attractiveness

of the local people’ s market, and then the marketing

of Pinduoduo should have the focal of the promotion

of customer trust, which has been achieved after the

market has successfully entered the global market, so

that the customer can find the product needs

effectively and achieve the order of goods, which in

the process of improving the customer’s confidence,

so the product is more transparent to the market,

which means the customers can find product needs

and complete the purchase of product information in

the global market with the help of information and

communication, because the market is more devoted

to customers, consumers are more satisfied with the

purchase of these products. which will increase the

amount of sand used by customers to promote them

and increase their level of satisfaction with the

company.

The Pinduoduo was growing more and more

global in the world than it was in the Southeast Asian

market (Figure 3). As seen in Figure 3, the Pinduodou

was able to expand its international market by

implementing regional management and system

optimization, which had a greater than 100% increase

in the number of foreign business revenues in the

latter part of the twenty-three-year period in

Southeast Asia. In order to market the country and the

Philippines in recent years, Pinduoduo began product

kinds that meet the needs of local consumers by

collaborating with local e-commerce platforms to

promote both Indonesia and the Philippines. In order

to guarantee the user experience is seamless as a

result of Pinduoduo concentrating on payment and

logistics systems in order to build local consumers'

emotional connections via social media, locally

produced content marketing to increase brand

awareness and favorability, and blockchain-based

trust mechanisms to assure product quality (Sohaib et

al., 2020; Pinduoduo et al, 2018). Following the

"authenticity guarantee" (Gross Merchandise, 2020;

GMV) (Figure 3). According to financial report data,

the amount of Pinduoduo that owns the foreign user

base exceeded 15 million dollars by the year (Figure

4). According to Figure 4, there was more than

120%increase in the GMV of Pinduoduo's foreign e-

commerce platform (TEMU)than there was a

120%annual increase in the trust mechanism

optimization plan and the efficiency of the

localization operation.

Data source: Guosheng Securities Research Institute

Figure 3: Mature branded sellers share news pin international market in 20162.

16%

12%

NEW CHANNEL DISTRIBUTION FOR ESTABLISHED

SELLERS IN 2023

Temu TikTok SHEIN e-commerce Mercado Libre

happy-go-lucky Qitong Lazada Shopee free-standing

Analysis of Pinduoduo’s Social E-Commerce Model-Balancing Brand Building and Consumer Trust

523

Data source: https://ecdb.com/blog/temu-revenue/4995

Figure 4: The Pinduoduo Overseas total GMV and the forecast for 2025.

4.2 Amazon's Global Expansion: User

Experience and Brand Value

Shaping

The third quarter in the world (20153) was valued at

143.11 percent; Amazon ranked third in the country

(158.9 percent) at $ 158.9 billion in 2018; this figure

was higher than US$143.1 billion, as shown by the

company’s third quarter of 2018–20 revenue reports,

which were estimated to increase by 11%. Amazon

has been creating Amazon Prime to improve its local

and local logistics network in Europe by allocating

services and offering free, quick delivery and

exclusive deals, and to include additional products

that meet the needs of consumers by collaborating

with local businesses. It also increases the platform’s

attractiveness (Amiri and Vida, 2013; Amiri et al.,

2023) Amazon uses quality service and continuous

technological innovation to communicate the

"efficient, convenient, and reliable" brand notion with

regard to increasing brand value. Figure 5 shows that

Amazon's market share in Europe was more than

forty percent and that its Prime membership was

larger than 150 million, which supports the use of

brand value creation strategies and user experience

enhancement.

Data source: https://ir.aboutamazon.com/annual-reports-proxies-and-shareholder-letters/default.aspx

Figure 5: Amazon's online sales revenue and market share in 2024.

Through extensive studies, these enterprises were

able to build several targeted plans, which were then

merged with each of the company’s own strengths, a

coordinated local business, increased user

experience, optimized trust mechanisms, created a

brand value; and ultimately increased market

competitiveness as a result of the Pinduoduo and

Amazon case study, which also revealed that these

companies have developed a number of targeted plans

through in-depth research of the wants of their target

markets, combined with their own strengths;

optimized user experience and optimized trust

2022 2023 2024 2025

GROSS MERCHANDISE VOLUME (GMV) ON

TEMU.COM, 2022-2025

100

150

200

Q1 2024 Q2 2024 Q3 2024 Q4 2024

Net Sales and Segment Sales by Quarter in 2024

Net Sales North America Sales International Sales AWS Sales

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mechanisms; finally attained user growth and

increased market competitiveness. These statistics

fully verify the efficacy of the globalization strategy.

These empirical studies also demonstrate that brand

building and customer trust are important ways for

the company to achieve sustainable development, as

they provide a useful tool for other enterprises'

perfection of globalization and the development of a

consumer relationship.

5 CONCLUSION

To do a thorough study of the ways Pinduoduo

manages brand development and customer

confidence in relation to globalization, this paper uses

both case research and theoretical research together.

Pinduoduo has been able to achieve success in the

following areas of social e-commerce group

purchasing; and social virus development; it can also

be done through localized operation; user experience

optimization; and the building of trust mechanisms;

in Southeast Asia and elsewhere, Pinduoduo has been

able to increase brand effect on customers and trust

by using tactics such as improving the payment

logistics system; putting sincere product guarantee

rules and enhancing content marketing to the point

that there is much of a global increase in the number

of users, GMV is given path guidance, theoretical

support for the development of social e-commerce

enterprises worldwide, and the introduction of real

product guarantee policies are all made possible by

this study.

This report focuses more on how social e-

commerce model innovation works, which makes

sense for more in-depth research. As social media is

becoming more and more popular all the way to

socialize brands and customers, it will be a hot topic

for businesses to go global because of how to build

strong relationships with one another and increase the

conversion rate. Localized content marketing and

cross-cultural communication tactics are also a hot

issue for business to try, therefore in order to get a

precise fit between brand value and customer needs,

how to optimize the route of brand

internationalization through data-driven market

segmentation, and so on, there will be more problems

to be looked for. In the context of globalization, more

study may be done with the use of technology-driven

innovation models, the trust mechanism

development, and user experience optimization to

further the theoretical foundation of the organization

in order to realize the coordinated growth of brand

development and consumer trust in the global market.

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