e-Commerce Sustainability: The Case of Pinduoduo in China

Abstract

Internet-based platforms are competing fiercely in the Chinese market by fostering an omni-channel shopping ecosystem. Companies have grouped under two giants, Alibaba and Tencent, leading to one-to-many competition dynamics in the Chinese market. In the midst of this competition, the three-year-old Pinduoduo has gained attention with its fast growth, positioning itself as the third biggest e-commerce platform in China with 19.4% of the market share. Pinduoduo has targeted a niche market made up of cheap products, low-income workers, and small business owners in small cities. Recently, however, many Pinduoduo users have returned to their former platforms, due to the proliferation of fake and low-quality products on the platform. Our study aims to investigate the reasons that prompted users to return to other platforms after their Pinduoduo experience. We conducted in-depth interviews to understand this phenomenon and built a research model based on risk theory and the customer resistance to change (CRC) framework. Results suggest that switching costs and relative attractiveness influence CRC, while risk perceptions form negative attitudes toward CRC, which finally result in negative word of mouth. Finally, theoretical and practical implications are discussed.