Ben Gilbert: belief

Transcript context

…On the back of this, this is February 2017 when all this happens—the investment and the Mini Program launch. From 2016-2017, Pinduoduo over 3x their revenue to $270 million. They fully transitioned to the marketplace model. They got out of the retailing business. On the back of that, they file to go public. Then, they do go public in June of 2018, less than three years after the initial launch of the company and less than two years after the merger. Just incredible. Yeah. An important point that they make in this IPO prospectus is, not only did they grow like wildfire, they hooked into a consumer category that all these other ones overlooked. If we think about the way China has different cities, there's tier 1, 2, 3, and 4. Your tier 1 cities are the ones closest to the big commerce centers. Tier 4 cities are the ones farthest out toward the most rural areas. Wealth goes down from 1-4. What Pinduoduo did was they were able to effectively reach people in tier 3 and tier 4 cities. They are able to also reach a dramatically female audience. I think it's mostly 25-35-year-old females in these tier 3 and 4 cities. Not a super high dollar amount per purchase, but for many of them, this is the first experience with ecommerce. Pinduoduo is their gateway for these customers into the ecommerce world. Their bet is, look how fast we grew with these people. We're going to continue to grow quickly. As they start to accumulate more buying power, they're going to be purchasing from us. Yeah. That breaks up a couple of great points that we haven’t touched on yet. This has been one of the narratives for Pinduoduo for the last couple of years. It is bringing on these more rural users to ecommerce. And that is definitely true, but there are a couple of interesting things about it and I think were brilliant parts of the strategy. Remember where they started with produce and groceries and most of what the items that are being bought on this app are their everyday household essentials. Who’s doing that is whoever’s managing the household, and in many cases that’s women. In many cases, that’s women with children at home. If you look at the demographics of the app—at least in the earlier days—it’s now broadening and penetrating the whole economy. I think about 70% of the users were women. The biggest age demographic was between 25 and 35. It was all young mothers at home who were using this to save a whole lot of money on all their household purchases.…

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