Pinduoduo SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Implementing technology to help boost agriculture:Pinduoduo, which is considered to be China’s largest agriculture focused ecommerce platform has been experimenting and hosting competitions to allow technology enthusiasts to bring in new solutions to change the traditional way of cultivation. It will try deploying the smart agriculture solutions brought forward in the competition by the Food and Agriculture Organization (FAO) to traditional farms to allow budding agriprenuers to test their ideas at a larger scale. As Pinduoduo is devoted to helping farmers grow and consumers “buy well”, their goal now is to bring cutting edge tech to the fields of China and allow even small farmers with preferable smart Agri tools. As the Chinese agricultural industry is characterized by small farms, low digitization and e-commerce penetration, it is difficult to achieve economies of scale apart from the problem of a dwindling and aging workforce. Pinduoduo has planned to invest in developing a smart logistics system for agricultural produce transportation that can provide delivery in a very short time.

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Threats

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Political

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Economic

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Social

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Technological

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Legal

1. Implementation of the Chinese ecommerce law: In present times, China which is one of the largest and most dominant ecommerce markets in the world accounts for about forty percent of the global ecommerce space. The transactions recorded in this market are presumably larger than that of France, Germany, Japan and many other powerful economies put together. But such an enormous financial growth demands the attention of law makers and hence the first Chinese E-commerce law came into existence in 2019. Consumer protection, surveillance and supervision are some of the vital aspects that this law is addressing since there are some significant problems related to lack of protection of user rights, quality and safety, user data transparency, unfair competition and unregulated cross-border trade which continue to threaten the market.
Apart from addressing consumer data privacy and cyber security issues, this law aims to improve China’s reputation as a source of cheap and imitation merchandise by targeting false advertising. It also promotes cross border ecommerce market and small and micro enterprises. Hence, this law will help cross-border trade flourish as well as improve the reputation of China as a provider of quality goods to the world.
Hence, e-commerce companies like Pinduoduo Inc., will experience both positive and negative aspects of the implemented law. Positive effects include a clean and reliable image that will allow customers to believe in the quality of their products. Negative effects include that e-commerce companies will have to abide by all the stringent norms mentioned in the law especially with regard to the data privacy policy and defaulting any such policy could lead to legal action and punitive measures against the defaulting companies.

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Environmental

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