"New Pumm" initially invested 15 billion yuan. Why is Pinduoduo venturing into self-operated business?

Ask AI · How can Pinduoduo’s self-operated strategy enhance the value of China’s supply chain?

Jiaxing Pinghu is the largest origin for high value-for-money down jackets on Pinduoduo. By building a model of hit products and direct shipping from warehouses, its annual shipment volume exceeds 300 million units. Image source: Pinduoduo

In the strategy of “rebuilding Pinduoduo from scratch again in three years,” the plan is turning into concrete implementation, and the new PinMm is the core vehicle of this transformation

By Shi Ran

On March 25, Pinduoduo announced at its earnings conference call an important decision—to set up the “new PinMm” and launch brand self-operation.

According to the announcement, the “new PinMm” has already registered and established a dedicated special-purpose company in Shanghai. The company received a first tranche of cash capital injection of 15 billion yuan, and in the next three years it plans to cumulatively invest 100 billion yuan. This project will integrate Pinduoduo’s and Temu’s supply-chain resources, build a self-operated brand model, and focus primarily on global markets. It will systematically self-operate and incubate brands suited to different markets and different categories, enabling Chinese manufacturing to achieve high-standard output and leap toward the high end of the value chain.

On the same day, the earnings report showed that in 2025, Pinduoduo’s full-year revenue was 431.8 billion yuan, up 10% year over year; net profit (non-GAAP) was 107.3 billion yuan, down slightly by 12% year over year. The financial figures are relatively stable.

Zhao Jiazhen, Co-Chairman and Co-CEO of Pinduoduo, said that over the past three years, Temu’s rapid growth benefited from China’s supply-chain industrial dividend, and also created an opportunity for the upgrading of domestic supply chains. In 2026, China’s supply chain will enter a key window period for transformation and upgrading. Pinduoduo will marshal the strength of the entire group and strive to, within three years, drive the high-quality transformation of domestically self-operated brands through the “new PinMm,” thereby enabling China’s supply chain to move toward a value leap.

In recent years, brand going overseas has become a keyword for China’s manufacturing industry, but at present many supply-chain merchants still lack experience in going overseas and building brands. With the help of a platform, they can catch up with the overseas expansion pace more quickly and accumulate experience and capabilities. However, for Pinduoduo, this may also imply further pressure on profits.

At the earnings conference call, Liu Jun, Pinduoduo’s Vice President of Finance, pointed out that the external environment and competitive landscape are changing rapidly. To meet consumers’ constantly evolving needs, Pinduoduo must continue to explore and increase investment, and these investments “will inevitably affect financial performance.”

The natural outcome of years of planning

The rollout of the “new PinMm” is not accidental. It is an inevitable result of Pinduoduo’s long-term focus on supply-chain upgrading and enabling industrial belts.

In April 2025, Pinduoduo launched its billion-level “hui shang” strategy and began the platform’s transition from scale-driven growth to value-driven growth. Since then, over nearly one year, Pinduoduo has continued to drive efforts around this strategy. Specific initiatives such as “quality local specialties,” “new-quality supply,” and “going west in e-commerce” have been steadily advancing. Dedicated teams have gone deep into more than 100 high-quality manufacturing clusters, including Yiwu cosmetics, Shenzhen electronics, Shandong snacks, and Shaodong luggage, rooting themselves in every supply-chain link such as raw materials and components, and driving cumulative innovation in industrial belts.

All these measures laid an industrial, resource, and practical foundation for the rollout of the new PinMm.

Shaodong in Hunan is a core cluster for China’s luggage industry. Local student backpacks produced there account for more than 70% of the market share nationwide. The region has a complete manufacturing and production system and upstream and downstream supply-chain networks. It is a typical industrial belt that developed primarily through the OEM model.

However, for a long time, the Shaodong luggage industrial belt has mainly relied on OEM processing and label-sitting production. Local merchants often provide processing for overseas brands and domestic channel merchants, lacking capabilities for independent product R&D and independent brands. Product designs are highly homogeneous, profit margins have been continuously squeezed, becoming the core issue constraining the industrial belt’s sustainable development.

After launching the billion-level “hui shang” strategy, Pinduoduo leveraged its platform’s digital capabilities to provide end-to-end industrial support to luggage merchants in Shaodong. On the one hand, the platform consolidates and analyzes user consumption data and feeds back market demand for student backpacks in Shaodong across different age groups and consumption scenarios—core information including design of styles, functional configurations, material selection, and price positioning—providing direct market evidence for merchants’ product development. On the other hand, the platform offers professional advice on product design and optimization of production technologies, helping merchants shift from OEM work toward R&D, while also leveraging the platform’s traffic resources and marketing channels to support the building and promotion of Shaodong’s local luggage brands.

At present, the Shaodong luggage industrial belt has already achieved partial branding. Local merchants have launched multiple original backpack products that match market demand. Functionally, they add designs such as back-supporting, weight reduction, and waterproofing. In terms of styles, they also innovate by integrating the aesthetics of students of different age groups. Multiple products have become bestsellers on the Pinduoduo platform.

There are many cases like this. With self-operated business, Pinduoduo can go even deeper into the industrial chain. Based on users’ different preferences and consumption habits around the world, it can co-create more distinctive goods with industrial-belt merchants—goods with brand value and characteristics.

The rapid growth of Temu, Pinduoduo’s overseas expansion platform, provides another layer of assurance for the “new PinMm.” At the earnings conference call, Chen Lei, Co-Chairman and Co-CEO of Pinduoduo, mentioned that over the past three years, Temu’s rapid growth was a “key leap” brought by China’s supply-chain industrial dividend, and also brought new opportunities for rebuilding and upgrading domestic supply chains. Temu covered in three years what took Pinduoduo’s domestic e-commerce about ten years to do, and expanded its business to more than 90 countries and regions globally, laying a solid foundation for Pinduoduo to further deepen its focus on China’s supply chain.

Renowned entrepreneur and investor Duan Yongping said that it makes perfect sense for Pinduoduo to do online branding. They clearly know what can achieve volume and can push volume-based items to the extreme. You need the quality to be good, and the price the user gets is still low (the middle-channel costs have been removed). They only need to select a few representative products to build their brand; they don’t need to make all products. This is essentially the model of Costco (the world’s second-largest membership warehouse club). If Pinduoduo’s online brand had only around 4,000 SKUs, then in 10 years it would be quite formidable.

Qingdao’s century-old intangible heritage enamel craftsmanship creates online “bestsellers” through Pinduoduo Image source: Pinduoduo

Pinduoduo’s investment in the supply chain is also reflected in its earnings report, as its net profit fell year over year in 2025.

According to the earnings report, in 2025, full-year cost of revenues increased 23% year over year to 188.8 billion yuan, with the growth rate nearly double the revenue growth rate. This was mainly due to higher fulfillment costs, bandwidth and server costs, and payment processing fees. Total operating expenses increased 13% year over year to 148.4 billion yuan, of which R&D expenses rose 30% year over year to 16.5 billion yuan, mainly due to increased employee-related costs and spending on bandwidth and servers.

Chen Lei emphasized that over the past year, Pinduoduo has consistently adhered to a strategy of high-quality development. It will continue to pursue a long-term approach and will invest more resources into the interests of all stakeholders of its services.

Unlocking new opportunities for China’s supply chain

In today’s e-commerce industry, where intense competition centers on new technologies and new businesses, most platforms are laying out diversified tracks and抢占 new opportunities. Pinduoduo, however, sticks to its core e-commerce business and treats the supply chain as the main line of development.

From early on, building high value-for-money supply by relying on industrial belts, to using a billion-level support strategy to help industrial belts tackle problems of homogeneous competition, and then to the “new PinMm” launching a self-operated brand model—Pinduoduo’s efforts to invest in China’s supply chain have continued to grow, and its support approach has also upgraded from initial traffic enablement and resource matching into a systematic reshaping of the industry. It is gradually driving deep integration of the platform’s advantages and the industrial belt’s advantages, helping China’s supply chain move in the direction of higher-quality development.

According to statistics from the Donghai County Nail Art Industry Association, the county’s annual sales of hand-crafted nail art reach 150 million sets, of which about 80 million sets are exported to 35 countries and regions worldwide through cross-border e-commerce Image source: Pinduoduo

The rollout of the new PinMm is a key arrangement for Pinduoduo’s “rebuild Pinduoduo from scratch again in three years” strategy, and it is also a brand-new upgrade to its supply-chain layout. On December 19, 2025, Pinduoduo Group’s shareholder meeting announced that it would focus on and reinvest in supply-chain upgrades, proposing a group strategy for high-quality development. It set a goal to strive to rebuild “another Pinduoduo” in three years. At that time, Pinduoduo management made it clear that the company would not take a diversified development route in the next stage, but would further focus on high-quality development of the supply chain.

At the earnings conference call on March 25, Zhao Jiazhen said that the “rebuild Pinduoduo from scratch again in three years” strategy is turning from planning into concrete execution. The company is advancing deep changes in business and organizations internally, and the new PinMm is the core vehicle for this transformation.

The rollout of the new PinMm is not only a strategic upgrade for Pinduoduo, but also a new opportunity for China’s supply chain.

For a long time, China’s manufacturing industry, backed by strong capacity advantages, has become an important component of the global supply chain. However, most industrial belts still focus on OEM processing and label-sitting production. They lack voice and say in areas like product R&D and brand marketing, and much of the profit is captured by overseas brands and channel merchants.

Hong Yong, Deputy Director of the Research Institute of the Ministry of Commerce, said that by building brand advantages, products are expected to form differentiated and premium capabilities, shifting from price competition to value competition, leading industrial belts out of homogeneous competition and achieving branded development.

According to statistics from the Donghai County Nail Art Industry Association, the county’s annual sales of hand-crafted nail art reach 150 million sets. Of these, about 80 million sets are exported to 35 countries and regions worldwide through cross-border e-commerce; Image source: Pinduoduo

From an industry development perspective, the emergence of the new PinMm also provides a new paradigm for empowering the real economy through e-commerce and supporting the high-quality development of manufacturing. E-commerce platforms, as an important bridge connecting production and consumption, should not only fulfill the basic function of trading goods, but also leverage digitalization, platformization, and ecosystem advantages to help the real economy develop in a healthy way.

In the past, most e-commerce platforms implemented “branding” strategies in the domestic market, while in overseas markets they still mainly focused on stocking and distributing goods. In overseas markets, there are many high-value regions. Local users care more about brands and quality, and they are also willing to pay a higher premium for quality brands.

In recent years, brand going overseas has become a major trend. From national conferences on foreign trade work, to mobilization and promotion meetings in multiple provinces, and the expansion of new trade formats such as cross-border e-commerce, these have become high-frequency phrases for measures to stabilize foreign trade. According to data from China’s General Administration of Customs, in 2025, exports of products under China’s own brands grew by 12.9%, and their share of total export value increased by 1.4 percentage points.

Looking ahead, as the new PinMm strategy gradually takes shape, Pinduoduo hopes to achieve its goal of rebuilding “another Pinduoduo” in three years. This new Pinduoduo is not only likely to break through again in platform scale and operating performance, but may also grow into a core industrial service provider that empowers China’s supply chain and promotes Chinese brands going overseas. Meanwhile, with the empowerment and collaboration of e-commerce platforms such as Pinduoduo, China’s supply chain will also complete the shift from scale advantages to value advantages, entering a new stage of branded and globalized development.