Pinduoduo: Our vision is distributed AI, where each user in the future will have their own dedicated AI algorithm and computing resources, which we call 'AI agents.'

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In November last year, Pinduoduo launched a new advertising tool, Smart Coupons.

For merchants, products enrolled in the 'Full-Site Push' program will automatically generate Smart Coupons, with the system allocating a portion of the promotional budget to subsidize consumers.

For users, the coupon value is determined based on their profile, primarily targeting infrequent, price-sensitive, and comparison shoppers.

Simply put, a portion of merchants' ad spending, which previously became platform commission revenue, is now converted into consumer subsidies—a move where the platform shares profits with users.

Looking deeper, this solves two problems.

First, it improves marketing precision. While 'Full-Site Push' and 'Billion-Dollar Subsidies' are open to all users, loyal customers don’t need incentives to make purchases. Smart Coupons enable personalized targeting, avoiding resource waste.

Second, it boosts conversion rates. Whether for loyal users or infrequent shoppers, personalized coupons increase their likelihood to buy.

Recently, rumors suggested Pinduoduo has built its own e-commerce AI model team, leveraging DeepSeek’s open-source models. Smart Coupons could become Pinduoduo’s 'second-stage rocket.'

The first-stage rocket, 'Full-Site Push,' monetized public traffic and drove significant growth.

The second-stage rocket, Smart Coupons, refines precision to cut costs and boost efficiency while expanding the market with merchants.

1.

First-stage rocket: Full-Site Push—Monetizing traffic.

There’s already extensive analysis on Full-Site Push, so here’s a brief overview.

Before Pinduoduo’s Full-Site Push, merchants on traditional e-commerce platforms faced complex ad campaigns—search ads, recommendation ads, on-site and off-site placements—requiring dedicated teams. For small and medium-sized merchants, this was prohibitively expensive.

Pinduoduo simplified this into a single ROI metric: merchants can continuously advertise as long as ROI stays acceptable.

This allows merchants to focus on production and supply while the platform handles traffic operations. Naturally, this specialization drastically improves efficiency.

It also incentivizes unbranded merchants to advertise, boosting platform revenue. On traditional platforms, big brands dominate ad budgets, leaving small players behind. But Pinduoduo’s model ensures fairness—$10 gets $10 worth of exposure, $100 gets $100. Overspending lowers ROI, keeping the playing field level.

Crucially, Pinduoduo’s basic unit is the product, not the store. A hit product doesn’t elevate the merchant’s brand or boost other items, forcing merchants to optimize each product—strengthening both their competitiveness and the platform’s.

2.

Second-stage rocket: Smart Coupons—Precision and growth.

The precision marketing enabled by Smart Coupons is straightforward. Overseas, AI’s biggest impact in advertising is seen with Meta and Applovin—AI naturally excels in data analysis and targeted marketing.

How does this drive growth?

Consider different user types:

Infrequent shoppers: If Pinduoduo’s average user shops 90+ times a year (with lower-tier users exceeding 100), targeting urban users who shop less with high-value coupons after inactivity can nudge purchases. A certain coffee chain does this—after a hiatus, a $1.40 coupon arrives.

Price-sensitive users: Saved or frequently viewed items trigger targeted coupons.

Comparison shoppers: Users comparing prices across platforms receive retention coupons (requiring cross-app data).

Countless scenarios exist. Precision coupons boost conversions—this is the platform’s growth.

Does converting commissions to coupons hurt profits?

Not necessarily.

As previously discussed, Pinduoduo operates like an army—the platform leads unbranded manufacturers to capture markets. Growth comes first, profit-sharing second.

While Smart Coupons appear to transfer platform profits to users, they also drive new dynamics: higher conversions lift merchant ROI, increasing ad spend and GMV. Precision cuts costs (e.g., reducing 'Billion-Dollar Subsidies').

Revenue and costs fluctuate, making net profit directionally ambiguous—even adjustable. But GMV, merchant ROI, and user experience all rise—what truly matters.

3.

Can competitors replicate this?

Like Full-Site Push, Smart Coupons thrive under Pinduoduo’s model: low-price focus and unbranded dominance. Others can try, but results will pale.

First, Pinduoduo has only public traffic—no private domains—treating all merchants equally. This lets the platform control Full-Site Push and Smart Coupons for universal personalization. Competitors, where merchants manage memberships and traffic teams, struggle to impose such systems without disrupting brand advertisers.

Second, price sensitivity amplifies Smart Coupons’ impact—perfect for Pinduoduo’s user base.

Third, coupons reinforce unbranded price wars, which brand merchants avoid.

Hence, Smart Coupons are Pinduoduo’s second-stage rocket.

With DeepSeek expanding China’s AI narrative, Smart Coupons’ AI-driven path will accelerate Pinduoduo’s flywheel: low prices → user experience → scale.

Constant evolution, always core-focused.

In early 2019, then-CTO Chen Lei shared Pinduoduo’s AI philosophy—not empowering merchants, but users: enhancing decision-making autonomy and product-match efficiency.

Diverse consumer demands defy fixed models. We envision distributed AI—each user with a dedicated AI agent (algorithm + compute resources). When users share data, their agent integrates private and public data via cloud computing to deliver tailored results. Agents also communicate, mimicking human interaction.

Distributed AI helps like-minded consumers learn from each other, lowering decision costs and boosting transaction efficiency. Further, it can reverse-optimize manufacturing (C2M).

Distributed AI agents.

This concept remains visionary today—and may soon materialize.

If any e-commerce firm can pioneer AI disruption, my bet’s on Pinduoduo.