Pinduoduo
Based on Wikipedia: Pinduoduo
The Company That Wasn't Supposed to Exist
In 2015, when Colin Huang decided to launch an online shopping platform in China, the smart money said he was wasting his time. The Chinese e-commerce market had already been carved up between two giants: Alibaba and JD.com. Together, they controlled so much of the market that analysts considered the battle over. There simply wasn't room for a third major player.
They were wrong.
Within a few years, Pinduoduo—the name translates roughly to "together, more savings, more fun"—would become one of the largest e-commerce platforms in the world. By 2021, the company was facilitating nearly 600 billion dollars worth of transactions annually. And its sister company, Temu, would go on to become the most downloaded shopping app across Europe in 2024, its distinctive orange branding appearing on phone screens from Lisbon to Stockholm.
How did a latecomer break into a market that everyone said was locked up? The answer lies in understanding who Pinduoduo decided to serve—and what that choice cost them.
Finding the Forgotten Market
Colin Huang, a software engineer who had previously worked at Google, noticed something the established players had overlooked. While Alibaba and JD.com competed fiercely for customers in China's wealthy coastal cities, hundreds of millions of people in rural areas remained underserved. These were farmers, small-town residents, and working-class families who wanted to shop online but found the existing platforms either too expensive or too complicated.
Pinduoduo was built from the ground up for these customers. The platform focused heavily on agriculture, connecting rural farmers directly with urban consumers. It introduced a social shopping model where buyers could team up with friends to get group discounts. The interface was simpler. The prices were lower.
This focus on agriculture became even more critical during the COVID-19 pandemic. When China's initial lockdowns in early 2020 shut down the traditional marketplaces where rural farmers had sold their produce for generations, Pinduoduo stepped in with a program to help them sell directly to customers online. Later that year, the company launched Duo Duo Maicai, a service that let consumers pre-order groceries and pick them up at designated locations—essentially creating a new distribution network that bypassed the traditional supply chain entirely.
The Counterfeit Problem
There's a Chinese word that Pinduoduo would rather not hear: shanzhai. It refers to knockoff or counterfeit products—cheap imitations of branded goods. And almost from the beginning, accusations of shanzhai products flooded the platform.
The criticism wasn't unfounded. When you build a marketplace optimized for rock-bottom prices, you attract sellers who achieve those prices by cutting corners. Sometimes that means generic products without brand names. Sometimes it means outright fakes.
Chinese domestic media hammered the company. Pinduoduo responded with what it claimed were aggressive countermeasures: in a single week in August 2018, the company said it shut down over 1,100 stores, removed more than four million product listings, and blocked 450,000 suspected counterfeit goods from being published.
But the problems didn't go away. The same year Pinduoduo listed on the American Nasdaq stock exchange, China's State Administration for Market Regulation announced it was investigating the platform. The company claimed to have removed over 10 million suspicious items and blocked 40 million suspicious links. To reassure customers, Pinduoduo announced a bold policy: anyone who received a counterfeit product would be compensated with ten times its value—three times what Chinese consumer protection law required.
This created an unexpected backlash. Pinduoduo also introduced harsh penalties for sellers: if a product was found to be counterfeit, the platform would freeze ten times the trading volume of that item from the seller's account. In July 2018, about a thousand sellers showed up at company headquarters to protest. There were physical confrontations with security guards. Many sellers took their grievances to court.
Pinduoduo won the vast majority of these cases. But the damage to its reputation was harder to measure.
On America's Blacklist
In April 2019, the Office of the United States Trade Representative added Pinduoduo to its list of "Notorious Markets for Counterfeit Products and Piracy." This list isn't a legal finding—it's essentially a name-and-shame document that the U.S. government publishes to pressure foreign companies and governments to address intellectual property theft.
Being on this list puts a company in uncomfortable company. Other entries have included websites notorious for streaming pirated movies, markets known for selling fake luxury goods, and platforms that distribute counterfeit software. For a company trying to expand internationally, it's a reputational stain that's difficult to wash off.
As of 2023, Pinduoduo remains on that list.
The Malware Scandal
If the counterfeit problem was bad, what happened in 2023 was arguably worse.
Google removed Pinduoduo's app from its Play Store after a Chinese cybersecurity firm discovered malware in versions of the app distributed through Chinese app stores. The malware wasn't subtle: it exploited known vulnerabilities in Android phones to gain elevated privileges, download additional malicious code, and access users' notifications and files.
The findings were confirmed independently by six different cybersecurity teams across the globe—Finnish researchers, Russian analysts, American experts, and Israeli firms all reached the same conclusion. Kaspersky Labs, one of the world's most prominent cybersecurity companies, found that certain versions of Pinduoduo contained "malicious code which exploited known Android vulnerabilities."
What happened next raised even more questions. Two days after releasing an update meant to address the concerns, Pinduoduo quietly disbanded the entire team of engineers and product managers who had developed the exploits. The team didn't disappear from the company, though—a majority were transferred to Temu, Pinduoduo's sister company that had launched in the United States just months earlier.
This detail is worth pausing on. If the malware was the work of rogue employees, why transfer them to the company's flagship international expansion rather than fire them? If the company genuinely didn't know about the exploits, why disband the team so quickly after Google's action rather than conducting a thorough investigation first?
The Corporate Shell Game
Pinduoduo is owned by a holding company called PDD Holdings. For years, PDD Holdings was headquartered in Shanghai. Then, in 2023, the company moved its legal domicile to Dublin, Ireland.
This kind of corporate restructuring is common among multinational companies. Ireland has famously favorable corporate tax rates, and many tech giants have established headquarters there for exactly this reason. But the timing—in the midst of the malware scandal and amid rising U.S.-China tensions—added another layer of complexity to understanding who Pinduoduo really is and who it answers to.
One detail that's harder to explain away: Pinduoduo maintains a data-sharing agreement with a unit of the People's Daily. That's not just any newspaper—it's the official publication of the Central Committee of the Chinese Communist Party, essentially the voice of the Party itself.
Surveillance and Control
In 2024, the Financial Times and Wall Street Journal reported on another troubling practice: Pinduoduo was suing former employees for violating non-compete clauses. That's not unusual—many tech companies enforce non-competes. What raised eyebrows was the evidence Pinduoduo submitted to courts: video recordings of former employees arriving at work at competitor companies.
Think about what that implies. The company apparently had surveillance footage of people who no longer worked for them, going about their daily lives at their new jobs. How was that footage obtained?
Pinduoduo's official response was that it does not "engage in any illegal or unethical surveillance practices of current or former employees." The statement is carefully worded. It doesn't deny having the footage—it denies that the surveillance was illegal or unethical.
Temu: The Global Ambition
In September 2022, PDD Holdings launched Temu in the United States. The name is a compression of "Team Up, Price Down"—a nod to the group-buying model that made Pinduoduo successful in China.
Temu's growth has been explosive. The app has been downloaded hundreds of millions of times globally. Its Super Bowl advertisements in 2023 introduced the platform to mainstream American audiences. And that map of Europe showing the most downloaded apps in 2024? Temu's orange dominated almost every country.
The business model is similar to what worked in China: ultra-low prices, direct shipping from manufacturers (mostly in China), and aggressive marketing spending. Temu has been willing to lose money on individual orders to acquire customers, a strategy that requires deep pockets and a long-term horizon.
But Temu also inherited some of Pinduoduo's problems. Questions about product quality, intellectual property concerns, and the lingering shadow of the malware scandal all follow the platform as it expands. When a majority of the team responsible for the malicious code was transferred to Temu, it raised obvious questions about whether the same techniques might appear in the international app.
The Security Question
There's a larger question hanging over Pinduoduo, Temu, and similar Chinese apps: what happens to the data they collect?
Every e-commerce app collects substantial information about its users—names, addresses, payment information, shopping history, device identifiers, location data. This is standard for the industry. But when a company has documented ties to a Chinese Communist Party publication, has been caught distributing malware that accessed user notifications and files, and operates under Chinese law that requires companies to assist with state intelligence work when asked, the data collection takes on a different character.
This isn't hypothetical paranoia. The malware discovered in Pinduoduo's app wasn't designed to serve ads or improve user experience. It was designed to exploit phone vulnerabilities and access private information. Multiple independent security firms from multiple countries all reached the same conclusion: this was malware, not just aggressive data collection.
The Uncomfortable Trade-off
And yet, hundreds of millions of people continue to use Pinduoduo and Temu. The prices really are lower. The selection really is enormous. And for many consumers, especially those on tight budgets, the theoretical risks of data exposure feel less pressing than the concrete reality of saving money on everyday purchases.
This is the uncomfortable trade-off at the heart of Pinduoduo's success. The company found an underserved market—first rural Chinese consumers, now budget-conscious shoppers worldwide—and served them when others wouldn't. Along the way, it accumulated a troubling record of counterfeit goods, malware distribution, and opaque data practices.
Whether that trade-off is worth making is a question each consumer answers for themselves, usually by continuing to tap "add to cart."
What Happens Next
Pinduoduo isn't standing still. In late 2025, PDD launched a Malaysia campaign, offering free shipping to customers there. The international expansion continues despite—or perhaps because of—the controversies at home.
The company faces headwinds. Regulatory scrutiny in the U.S. and Europe is increasing. The "notorious markets" designation hasn't gone away. And every new market brings new questions about data handling and corporate transparency.
But Pinduoduo has defied predictions before. The analysts who said there was no room for a third Chinese e-commerce giant were proven wrong. The company that wasn't supposed to exist is now one of the largest retailers on Earth, with global ambitions that show no signs of slowing.
That's either a story of entrepreneurial triumph or a warning about what we're willing to accept in exchange for cheap goods. Possibly both.