PDD is desperately trying to please merchants

Author | Huang Yu

Editor | Liu Baodan

After more than a year of "price wars", major e-commerce platforms seem to want to break free from this vortex. Since the second half of last year, they have shifted their focus more towards balancing user experience and merchant rights. Pinduoduo, which was once criticized for favoring users, has also begun to actively attract merchants.

On September 12th, Wall Street News learned that Pinduoduo once again upgraded the rights to waive merchant service fees. The technical service fee for post-payment orders has been reduced from 1% to 0.6%, and it now covers all merchants.

According to Wall Street News, not long ago, Pinduoduo had already reduced the technical service fee for post-payment activity orders to 60%, and now it has further expanded to cover all post-payment orders.

The so-called "post-payment" allows consumers to use the product first after placing an order, and then pay after satisfaction. This policy can to some extent increase consumers' willingness to purchase and boost sales, but merchants need to bear the risk of consumer default.

By lowering the technical service fee for post-payment orders, Pinduoduo hopes that when merchants choose to use the post-payment feature to stimulate consumption, they can further reduce operating costs.

Some e-commerce insiders told Wall Street News that this is particularly important for merchants who rely on the "post-payment" feature, as it can effectively alleviate the financial pressure they face during promotional and large-scale events.

This is part of Pinduoduo's comprehensive reduction plan announced at the second-quarter performance conference after launching the "Billion Yuan Reduction" policy for merchants.

At the conference, Pinduoduo's management stated that the overall scale of Pinduoduo has reached a considerable level, and they are prepared to sacrifice short-term profits, invest in ecological construction through a combination of support and governance for the long term.

In terms of supporting merchants, Pinduoduo will invest billions of resources and significantly reduce transaction fees for high-quality merchants, with an expected reduction of 10 billion yuan in the coming year.

At that time, Pinduoduo also disclosed that it has introduced refundable rights for resource position technical service fees and promotion software service fees for merchants. For example, the refundable rights for technical service fees not only apply to orders canceled or refunded by users during the event, but also include return and refund orders after users receive the goods.

Since mid-August, Pinduoduo's "Billion Yuan Reduction" policy has been gradually implemented.

In terms of technical service fees, in addition to the post-payment technical service fee being reduced to 0.6%, for orders generated by merchants participating in Pinduoduo's on-site resource activities, the platform will refund 1% of the basic technical service fee for post-payment orders proportionally after users initiate a refund, and 0.6% for other orders.

The so-called resource position usually refers to promotional channels on Pinduoduo's homepage such as billion-yuan subsidies, flash sales, platform promotions, 9.9 special sales, trendy good prices, group purchases, etc. This reduction policy was launched on August 13th.

At the same time, Pinduoduo has also opened up refundable rights for promotion service fees. It is reported that for orders with full refunds before shipment, Pinduoduo automatically refunds the promotion software service fee to merchants in the form of red packets, without the need for merchants to file an appeal Some Pinduoduo merchants have informed Wall Street News that Pinduoduo's promotional service fees are not low, with a minimum standard promotion price of 4 yuan per order, and the highest could reach over a dozen or even twenty-something yuan per order. However, if users who were brought in through promotions cancel their orders immediately after placing them, the platform will not refund the promotional service fees that were deducted.

"For many merchants, this is a significant burden, as after deducting the promotional service fees, they may not even make a profit," said one merchant.

After this adjustment by Pinduoduo, it may reduce a significant portion of the burden on merchants. Another Pinduoduo merchant revealed that since August 27th, the platform has been gradually refunding promotional fees to store backends, with an average daily refund of over a thousand yuan in red envelopes. At this rate, the amount of refunds in a year will be close to 400,000 yuan.

By September 5th, Pinduoduo announced that the basic deposit for merchant stores will be reduced from 1,000 yuan to 500 yuan, and the initial deposit for newly established individual and corporate stores will also be reduced to 500 yuan.

It is understood that the reduction of the deposit for merchant stores on Pinduoduo is currently undergoing centralized testing. The first batch of merchants benefiting from this policy has covered nearly 70 categories, with some merchants having already completed withdrawals. Millions of merchants will benefit from this, especially those operating multiple stores, as operating costs are further reduced.

In addition, starting from September 9th, for all transit orders generated on the Pinduoduo platform in remote areas, merchants only need to send the orders to the transit warehouse. The logistics transit fees for second shipments to remote areas such as Xinjiang, Tibet, Gansu, Ningxia, Inner Mongolia, etc., will be fully borne by the platform. Currently, this new exemption measure has covered all merchants on the platform.

This is another exemption policy introduced by Pinduoduo to merchants following the refund of technical service fees, promotional service fees, and the reduction of store deposits.

At the same time, Pinduoduo has begun to upgrade the after-sales service system for merchants, opening a green channel, establishing a special after-sales service team, fully supporting merchants to appeal against abnormal orders, malicious complaint orders, consumer negative experience orders, etc. After successful appeals by merchants, the platform will compensate for the relevant orders and will no longer limit the number of appeals by merchants.

It is reported that this new benefit is currently undergoing preliminary testing, and some merchants can already enjoy this benefit. It is expected to cover all merchants in the near future.

This move by Pinduoduo to upgrade merchant after-sales service may to some extent alleviate merchants' dissatisfaction with the "refund only" mechanism. It is worth noting that the "refund only" mechanism on Pinduoduo has always been a pain point for merchants on the platform.

Clearly, after going through a phase of rapid expansion relying on strategies such as "low prices" and "refund only," Pinduoduo is now choosing to pause and no longer prioritize scale expansion as the primary goal, but instead focus more on protecting merchant rights.

In the second half of the e-commerce competition, this is something that Pinduoduo must do well