Pinduoduo passes its profits to farmers — and scores points with the Chinese government

Potato box delivery... coming in hot. Pinduoduo has surpassed Alibaba — aka: "the Amazon of China" — as China’s most popular ecomm platform by user count. Pindoudou's app connects farmers/distributors with Chinese consumers. The $120B "social ecommerce" platform doesn't really have a US equivalent: shoppers can play games to win prizes, like discounts or boxes of mangoes. Pinduoduo’s sales still trail Alibaba’s, but it’s growing faster — and its stock is up 10% over the past year, while Alibaba’s down 40%.

Mangoes > Louis Vuitton… The ruling Chinese Communist Party (CCP) has increasingly emphasized its goal of achieving “common prosperity” — and alleviating rural poverty. That's partly why it's cracked down on Big Tech this year, from fintech giant Ant Group to video game giant Tencent. Oh, and China fined Alibaba a record $2.8B for "anticompetitive practices." Think: preventing luxury merchants like Louis Vuitton from selling on other platforms.

• Pinduoduo is on China's "better" side: Its agriculture-friendly biz model is better aligned with China's rural prosperity goals. Its quiet social presence and focus on low-income customers has helped it avoid Alibaba-level fines.
• Pinduoduo wants to keep it that way: After turning its first profit last quarter, Pinduoduo announced plans last week to donate $1.5B in profits to Chinese farmers.