Low-end manufacturing “Pinduoduo”

Pinduoduo’s success at the capital level has further brought the problems in its genes to the table.

In fact, although Pinduoduo was successfully listed on Nasdaq three years after its establishment, Pinduoduo’s success at the capital level has not allowed the public to focus more on its rapid development. On the contrary, it further brought the problems existing in its genes to the table. The following article is excerpted from the 2018 issue 34 of "Sanlian Life Weekly".

Author: Wang Zihui

But Pinduoduo seems to feel a little unfair. On July 31 of that year, Pinduoduo founder Huang Zheng told the media: “We have always been very serious about fighting counterfeiting.” Earlier in April, he claimed in an interview with the media: “No one in China works harder than us to fight counterfeiting. platform.”

On the one hand, there is a “gathering of fakes” in the eyes of the outside world, and on the other hand, there is a “serious fight against counterfeiting” in your own words. From different standpoints, your understanding of Pinduoduo will be different. Very different.

The 42-year-old Mao Ge commented on Pinduoduo’s anti-counterfeiting efforts as “too strict”. As a small and medium-sized seller engaged in the clothing business on the Pinduoduo platform, in December last year, Brother Mao received an on-site letter from Pinduoduo, saying that a leather jacket he sold was "related to counterfeiting". For products, cash withdrawals from store accounts are restricted, and compensation is also imposed. The amount is 10 times the historical sales of the counterfeit products. On that day, Mao Ge's store sold approximately 380,000 yuan, including payment, deposit, and cash withdrawals, which meant that he was fined as much as 3.8 million yuan.

Due to dissatisfaction with Pinduoduo’s punishment, some merchants started to go to court against Pinduoduo in 2016. Starting from this year, as the number and amount of fined merchants continued to increase, merchants’ rights protection actions became more and more intense. . On social media, "Cat Brother" is called a "spiritual leader" by some rights protection businesses. Brother Mao’s home is in Chenzhou, Hunan, but in the past eight months, he has spent most of his time in Shanghai, with the purpose of organizing merchants to go to Pinduoduo’s headquarters to defend their rights.

In the past few months, he has joined forces with rights protection merchants dozens of times to protest downstairs at Pinduoduo’s headquarters, Jinhongqiao International Center in Changning District, Shanghai. The latest action was scheduled for the morning of August 13. Although it was publicized many days in advance in QQ and WeChat groups with a total number of over a thousand people, only a dozen people came downstairs for this collective action. In previous rights protection activities from early March to the end of June, there were often as many as 40 or 50 people from rights protection merchants. Everyone would wear cultural shirts with "Pinduoduo pay me back my hard-earned money" and try to break through the security defense line and rush into the elevator. Go upstairs. But not many people actually get their money back this way.

Therefore, the event on August 13th was more like a spiritual oath and enlightenment for newcomers. Among the dozen or so people who came that day, four young people were from Tongxiang, Zhejiang Province. They had all opened clothing stores on Pinduoduo. Since the second half of last year, they had been punished one after another. Not only had their stores been blocked, but their funds had also been frozen. , the amount ranges from tens of thousands to over two hundred thousand.

Jun Chen is one of them who has the most experience in safeguarding rights and has already taken Pinduoduo to court. The other three people came to Pinduoduo's headquarters for the first time. They went to the front desk of the office building and asked to go to the 29th floor. After the front desk lady called for them, two young Pinduoduo "reception team" staff received them and took them there. With security personnel escorting them left and right, the staff recorded the store information and contact information of the three of them, and then asked them to go back and wait for news.

"We have tried it a long time ago, but it doesn't work. They will call you in a few days and tell you that your store violates the provisions of the "Pinduoduo Platform Cooperation Agreement." You go back and take a good look. Look at this agreement, we have mentioned it in this article." After seeing the attempts of the other three, Jun Chen showed a sympathetic smile.

Without exception, all merchants punished by Pinduoduo were informed that they had violated certain regulations in the "Pinduoduo Platform Cooperation Agreement", mainly including selling fake goods, false propaganda, and false delivery. etc. The penalties for violating the agreement are extremely severe and even seem unreasonable: "Merchants are required to pay 10 times the historical total sales (based on product ID) of 'seriously problematic products' sold through Pinduoduo as consumer compensation." Consumers, if the merchant refuses to pay the compensation, Party A has the right to use the merchant’s store funds to offset the consumer’s compensation.”

One penalty will cost the entire family, and the wife will also be punished for this. After divorcing him, Mao Ge’s attitude towards Pinduoduo may be representative of many fined merchants: “I just want to fight for my life.”

But because of the previously exposed counterfeit TVs and counterfeit laundry detergents, etc.” "Fake brand-name products", merchants also cannot get support from outside public opinion. Ah Le, who was also on the scene to defend his rights that day, did not think what he was selling was fake. "For example, just like me, Skyworth, if a buyer asks you if it is Skyworth and you tell him it is Skyworth, then you are selling a fake. I have already told the buyer that I am not from Skyworth. . ”

On this point, A Le and Pinduoduo founder Huang Zheng are on the same side. At a media communication meeting on July 31, Huang Zheng said that they are serious about cracking down on counterfeiting, but the outside world confuses copycats with fakes.

Huang Zheng divided these controversial products into two categories. He defined products that completely impersonate other brands as deceiving consumers and are fakes; but there are some who are not responsible enough and want to take advantage of well-known brands, such as "Qingfeng" Paper towels, "This issue is relatively complex. Fundamentally speaking, I think these manufacturers should be guided to make good, cost-effective products."

Huang Zheng's words are neither explicit nor full of ambiguity. , everything depends on the content of the "Pinduoduo Platform Cooperation Agreement". "Product description does not match" is the reason why most merchants are fined. Differences in ingredients, size and style are all listed here. Jun Chen's example is quite representative. One of his cotton clothes was randomly inspected by Pinduoduo and found to be not pure cotton. Several related stores opened by him and his relatives were closed, and all his funds of more than 200,000 yuan were also closed. is frozen.

Another of his companions was punished because a sweater whose length was marked as 50 centimeters was found to be only 48 centimeters. On the one hand, Junchen insisted to me that the ingredient list they provided was true, "But Pinduoduo is different. He doesn't agree with your thing." On the other hand, they also believed that this kind of "nitpicking" "The inspection is unconvincing.

After sitting in the smoking area in front of Pinduoduo’s headquarters for most of the day, the day’s rights protection activities yielded no results, and Jun Chen and the other four had no choice but to go home. Return to Tongxiang from Shanghai. It only takes 40 minutes by high-speed train. The most famous place here is Wuzhen, the representative water town. But 20 kilometers southeast of Wuzhen, Puyuan Town is the most economically powerful township unit in this county-level city. This town has a permanent population of 200,000 and is the largest woolen sweater distribution center in China. It is said that nearly 700 million woolen sweaters are produced every year, and the production and sales account for more than 60% of the country's total (some data say it is 40%).

Puyuan Wool Sweater Market has 19 trading areas and more than 10,000 shops. Don’t think that all they sell here are woolen sweaters. In fact, you can find almost everything here, from T-shirts to underwear to autumn coats. Shops are lined up next to each other, with names like "Weilang Family" and "a combination of local and foreign" everywhere.

More than ten years ago, the customers here were wholesalers through offline channels; a few years ago, the word "Taobao Supply" began to appear, and subsequently, on "Tmall" and "JD.com" "After that, the name "Pinduoduo" appeared.

Jun Chen took me into a familiar shop, where the owner and his family were sorting out summer clothes. "My clothes here are all 95% cotton, don't worry." The shop owner, Lao Zhang, said after seeing our caressing movements, his tone was very confident, but the slippery feel of the clothes themselves told us that this may not be true, and after looking through it There is no ingredient label on the entire piece of clothing, and the price is only 25 yuan. In another store that mainly sells shirts, we saw the possible real ingredient list - 48% polyester fiber + 48% viscose fiber + 4% spandex. A large number of cheap recycled fibers and synthetic fibers. is the main material that these clothes are made of.

Such clothes can be found everywhere in mid- to low-end hypermarkets or wholesale markets across the country. It is difficult to define them by the concepts of "fake" or "copycat". Over the past two summers, hundreds of thousands or even millions of pieces of clothing of this quality have been sold through Pinduoduo’s channels. Lao Zhang told us that since last year (2017), the shipment volume of Pinduoduo platform has almost kept pace with Taobao. “It’s just that on Pinduoduo, everyone’s profits are lower.”

Lao Zhang told us that the clothes produced by the manufacturer are all "innocent". Every dealer can wear whatever brand they like when they take it back, from Septwolves to Playboy to Crocodile, everyone The most popular and the most attractive to consumers, "Some time ago, they put up the 'Septwolves' brand and sold it for more than 40 yuan. If the sales are good, they can sell thousands of pieces in a day."

Merchants can If you print your own hang tags, some merchants will also get a brand authorization letter to hang in the store in order to reduce risks. Jun Chen purchased the "Playboy VIP" brand authorization from a company in Shanghai. Each tag cost a few yuan, but he also told me: "This 'Playboy VIP' is a trademark registered by a domestic company. We are still in litigation with that company in the United States.”

In Lao Zhang’s store, Jun Chen will select the styles and list them on Pinduoduo, and then come to Lao Zhang’s store to pick them up based on the user’s order status. The goods will be packed and shipped by yourself. The price of a small express package is 5 yuan, and if the quantity is large, it can be a few cents less. Through this complete industrial chain, even if a piece of clothing only sells for 20 or 30 yuan on Pinduoduo, Jun Chen and the cat friends can still earn at least 5 yuan or more.

Lao Zhang said that today’s merchants have learned to be smart and don’t write the ingredients at all. I just tell them what the ingredients are during random inspection. For those products with ingredients marked, they asked me disdainfully: "29 Is it possible for clothes that cost 100 yuan to be made of 100% cotton?

I asked A Le a similar question: Is a TV worth a few hundred yuan reliable? Frankly speaking, the difference between big brands and small brands is mainly reflected in two aspects: workmanship and after-sales service. In the manufacturing of TV sets, screens account for 80% of the cost. Small domestic manufacturers are unable to produce TV screens. They usually buy cheap second-class or second-hand screens, match them with cheap casings, and assemble them by hand.

"This kind of small factory is also very formal. After installation, each machine has to be left there to play for 24 hours. After testing, it is installed and put on the market. The quality is a little rough, but you can watch it." And most of these cheap TVs It comes from A Le's hometown - Dashi Street, Panyu, Guangzhou.

The outside world condenses the products on Pinduoduo into “low price” and “sufficient”, which Ale thinks is quite appropriate. Similar logic also applies to daily chemical products with larger sales volume. Laundry detergent is a perfect example. In this category, there are many types of laundry detergent with "9.9 yuan for two pounds with free shipping" sales of more than one million pieces. Most of them come from Gengzhuang Village, Shenze County, Hebei Province. One bottle The cost of a 2kg bottle of laundry detergent is around 8 yuan.

Playboy authorized men’s clothing for 29 yuan, Skyworth TV for 900 yuan, Haodaitai laundry detergent for 9.9 yuan... These are either “copycat” or “fake” products that have become popular on Pinduoduo. Most popular items. According to Pinduoduo’s listing prospectus, its 4.3 billion total orders in 2017 had an average order volume of only 32.8 yuan. For comparison, when Alibaba went public in 2014, Taobao’s average order price had reached 180 yuan.

Almost all Pinduoduo merchants have the same identity: former Taobao sellers. When Internet commentator Liang Ning recently analyzed the rise of Pinduoduo, he listed Taobao's anti-counterfeiting campaign in 2015 and the merchant spillover caused by JD.com's abandonment of Paipai.com as one of the dividends of Pinduoduo's development.

History is similar. As the ancestor of C2C e-commerce, Taobao has also suffered from accusations of the proliferation of fake goods. On January 23, 2015, the State Administration for Industry and Commerce of China announced the results of random inspections of online shopping products. The authenticity rate on Taobao was only 37.25%. Seven law firms in the United States also announced an investigation into the counterfeit sales of Alibaba and its platforms. Affected by this incident, Alibaba Group's stock price plummeted, and its market value evaporated by nearly US$11 billion.

Immediately, Ali launched a large-scale "anti-counterfeiting operation." According to Alibaba, in the 12 months from September 2015 to August 2016, Alibaba removed 380 million product pages, closed 180,000 illegal stores and 675 operating institutions. Since the beginning of this year, small and medium-sized merchants such as Mao Ge have clearly felt that Taobao's management is becoming more and more strict, and no fake orders are allowed, and direct authorization letters are required for the brands sold; on the other hand, the traffic of small and medium-sized merchants is also tilted. There are fewer and fewer, and more support is given to the development of large-scale stores on the Tmall platform.

"2014 was the best year, and it has been going downhill since then." Brother Mao said. And just in September 2015, Pinduoduo went online. In the following years of 2016 and 2017, Pinduoduo continued to attract small and medium-sized businesses through preferential policies such as "zero yuan entry" and "no threshold entry", and its annual user volume and revenue maintained a growth rate of more than 200%. In September 2017, Pinduoduo went to Jun Chen’s hometown Puyuan Town to hold an investment fair. Because of the large-scale leaflet distribution, hundreds of people came to the town that day, most of them were Taobao sellers. Jun Chen and the others saw After using words such as "zero yuan entry" and "traffic tilt" that are different from Taobao, many people joined Pinduoduo with the mentality of giving it a try.

From Panyu, Guangdong, to Tongxiang, Zhejiang, and then to Shenze, Hebei, more and more merchants in the low-end supply chain across the country have found a living space on Pinduoduo. Analysis by Guotai Junan Securities shows that 65% of Pinduoduo’s users come from cities below the third and fourth tiers, and are mainly middle-aged people in their 30s and 50s. These groups are defined as “groups that Taobao cannot satisfy.” A Le said that merchants like them simply cannot survive on Taobao because there is no traffic. His own store on Taobao is difficult to find, and the number of views on his products is very low.

However, on the one hand, Pinduoduo relies on these businesses that wander in the gray area to rise. On the other hand, it has been questioned and restricted because of these gray factors. From a certain perspective, this is the dilemma Pinduoduo faces: it must show its determination to fight counterfeiting, but too much force in fighting counterfeiting will erode its platform foundation.

If we look deeply into the quality of products, it is difficult for rights protection merchants such as Mao Ge and Jun Chen to make excuses, but what they question is Pinduoduo’s decision to punish them: “On Taobao, products are removed from the shelves and stores are closed. Which platform will directly take away all the merchant’s money?” At the same time, they also believe that the similar products still sold on Pinduoduo are no different from theirs. "You see it's so cheap, it's all fake." A Le said to me, pointing to a TCL TV priced at about 1,000 yuan.

Pinduoduo has its own explanation for this. Huang Zheng likens the control of counterfeit goods to "Dayu's flood control": "You can't just rely on blocking, but also on diversion, because there are so many factories there, you must give them a good environment and move them to good places. "Go and ignite." He also believes that governance should be prioritized, and issues that may explode or pose major safety risks to people should be addressed first.

But none of these rhetoric can resolve the conflicts between them and the merchants.

For this reason, in addition to defending their rights at the gate of Pinduoduo’s headquarters, merchants who were fined have also filed lawsuits. Only Mao Ge knows that there have been more than 760 cases against Pinduoduo. A lawyer surnamed Zhao has become a celebrity in the industry. Since August 2016, he has been taking over cases related to Pinduoduo. He claims that "it's okay if there are not 100."

In the first year, he was often able to help merchants get some money back through out-of-court settlements. Since the end of last year, Pinduoduo’s attitude has become more and more tough, and he has lost more and more cases. He was nicknamed "Zhao Buying" in the business rights protection group. Because he did not trust Lawyer Zhao, Brother Mao chose to come to Beijing to find a lawyer to file a class action lawsuit. He wanted to gather more businesses to defend their rights.

Just before they and I left the Pinduoduo headquarters on August 13, a sharp-eyed merchant happened to see Huang Zheng come out of the building, get into a Mercedes-Benz parked at the door and speed away. , this was the first time they saw Huang Zheng himself. As the Mercedes-Benz disappeared from sight, the merchants were silent for a few seconds, with mixed emotions in their eyes.

But Huang Zheng definitely didn't see them, and even behemoths like Alibaba would not always remain in his eyes to some extent. In a previous exclusive interview with the media, Huang Zheng once said: "We don't want to be the second Alibaba. The existence of Pinduoduo itself is a model, and we are in the early stages of creating this model. You can call me low , call me junior, but you can't ignore me.

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(Intern Qiu Zhongying also contributed to this article)