From "Hundred Billion Support" to "New Pinduoduo": The Path of China's Manufacturing Upgrading Behind Pinduoduo's Story

Ask AI · Why is Pinduoduo still heavily investing in the supply chain despite profit declines?

(Source: Observer Network, Zhang Zhifeng)

When Chinese manufacturing is no longer satisfied with expanding at scale, and instead pursues value creation; when e-commerce platforms stop chasing short-term profits and instead deepen their focus on the industrial foundations—perhaps this is a historic step for China’s industrial chain to move toward the high end of the global value chain.

On the evening of March 25, Pinduoduo Group released its 2025 fourth-quarter and full-year financial reports.

The financial report shows that total revenue in Q4 2025 reached RMB 123.912 billion, up 12% year over year; for the full year, total revenue was RMB 431.846 billion, up 10% year over year.

More than the financial report figures, what has drawn the market’s attention is that the company also announced a strategic upgrade: it established the “New Pimpim” self-operated brand company, with an initial capital injection of RMB 15 billion. The plan is to投入 RMB 100 billion over three years to integrate Pinduoduo and Temu’s global supply chain resources and push Chinese manufacturing toward the high end of the global value chain.

This series of actions signals that the “recreate another Pinduoduo in three years” strategy proposed at Pinduoduo’s shareholder meeting in last December has been formally implemented. During the earnings call, co-chairman and co-CEO Zhao Jiazhen said, “2026 marks the starting point of our journey into the next decade. As we open a new chapter, supply-chain investment will become our most steadfast strategic direction.”

The “giving benefits” logic behind the financial report

Worth noting is that while Pinduoduo’s revenue grew, its profit declined.

In Q4 2025, net profit attributable to ordinary shareholders was RMB 24.541 billion, down 11% year over year; for the full year, net profit was RMB 99.365 billion, down 12% year over year.

But in fact, this change is not unexpected—it is the inevitable result of strategic adjustments: in 2025, sales and marketing expenses were RMB 125.288 billion, up 13% year over year; R&D expenses were RMB 16.496 billion, up 30%.

The growth in these two expense categories is mainly directed to the supply-chain side. The former includes expenditures such as subsidies for merchants and consumers, traffic support, market promotion, and so on; the latter includes technology investments such as supply-chain digital tools and industry-belt data systems.

As the company’s management said in the financial report: “The external environment and competitive landscape are undergoing rapid change. To meet consumers’ evolving needs, we must continue to explore and increase investment. These investments are long-term and will inevitably have a far-reaching impact on our financial performance.”

The “RMB 100 billion subsidy” strategy is precisely the core embodiment of this investment logic. Since it began in April 2025, through special campaigns such as “DuoDuo Good Local Specialties,” “new-quality supply,” and “e-commerce going west,” it has already covered hundreds of industrial belts across the country.

Among them, “packages into villages” is built by the platform funding/subsidizing county-level transfer warehouses and village-level pickup points in more than 10 provinces and cities. It extends courier services to remote rural areas, further unlocking rural consumption potential, promoting equal access to consumption rights between urban and rural areas, strengthening the basic盤 of domestic demand, and enabling coordinated implementation of “making the pie bigger” and “sharing the pie well.”

Not long ago, Pinduoduo rolled out free delivery of goods into villages, bringing remote rural areas into the “free-shipping zone.” (Photo by Zhang Chenhao)

Through a series of initiatives, Pinduoduo continues to pass benefits to the industrial side, from reducing commission fees and optimizing traffic allocation to investing in infrastructure, forming a systematic support system covering both production and consumption ends.

Value leap of “New Pimpim”

On the day the financial report was released, Pinduoduo officially announced that the “New Pimpim” special-purpose company has been established in Shanghai. This move is seen as the first major deployment of Pinduoduo’s “heavily investing in China’s supply chain” strategy.

According to the disclosure, “New Pimpim” will integrate Pinduoduo and Temu’s global supply chain resources, and through a self-operated brand model, systematically incubate a brand matrix for diversified markets. It will focus on three major measures: establishing a special-purpose company, investing RMB 100 billion over three years to comprehensively cover domestic industrial belts, and launching customized manufacturing solutions; building a professional team to go deep into industrial belts and provide integrated product, technology, and marketing solutions; and rolling out an all-round brand overseas expansion solution to escort industrial belts as they go abroad.

Analysts point out that the core value of the in-house brand model is that manufacturing companies can escape the low value-added predicament of OEM and brand-labeling, gain control over product definition, pricing leadership, and channel control, and use consumer data to feed back into R&D and design—enabling a paradigm shift from “producing for orders” to “creating for demand.”

Behind this strategic transformation, from the perspective of the company itself, is a clear follow-through and escalation of its earlier “RMB 100 billion subsidy” strategy. If we elevate the lens further, it is also a historic shift of China’s supply chain from “exporting production capacity” (product output leveraging supply-chain scale advantages) to “exporting industrial capabilities” (globalized output of brand, R&D, standards, and full-chain supply-chain capabilities).

Over the past three years, Temu expanded its business to more than 90 countries worldwide, but it has mainly relied on the scale advantages of China’s supply chain.

“New Pimpim” goes one step further: through the brand self-operated model, it systematically incubates brand matrices for different markets, pushing Chinese manufacturing to upgrade from OEM production to brand creation.

From the industrial belt transformation of Shaodong backpacks to Pu’er coffee

In Shaodong, Hunan, local production accounts for more than 70% of the students’ backpacks nationwide, yet for a long time it has been trapped in a “homogenized competition” dilemma.

Pinduoduo’s team stationed at the industrial belt, guided companies in developing differentiated product lines based on consumer big data. It also collaborated on design resources to build a regional public brand called “Backpack Town,” and supported factory groups to establish independent brand matrices through dedicated traffic support and quality-control standards—enabling a leap from OEM brand-labeling to brand operations.

Similar transformation paths have been rolled out in multiple places: in Yunnan’s Pu’er coffee industry, with support from “DuoDuo Good Local Specialties,” it established a standardized planting and traceability system and launched premium sub-brands; in Zhejiang’s Pinghu down jacket cluster, it developed season-based product lines by relying on the platform’s trend insights and collaborated with designers to build a vertical brand; in Shandong’s Weihai fishing tackle industry, it introduced industrial design capabilities to build a system of professional equipment brands.

Over the past year, “DuoDuo Good Local Specialties” has entered more than 100 agricultural product regions, promoting long-term development of agricultural and specialty industries. (Photo by Min Shan)

These practices together outline a new blueprint for industrial-belt upgrading: “data-driven R&D → standards empower production → brand reshaping of value.”

Hong Yong, an associate researcher at the Research Institute of the Ministry of Commerce, has repeatedly pointed out: “By building brand advantages, products are expected to form differentiated and premium-earning capabilities. This changes competition from price-based to value-based, leading industrial belts out of the situation of homogenized competition.”

National strategic significance of the supply chain

Beyond brand-building capabilities, Pinduoduo’s resolve to build its own self-operated brands relies even more on its deep influence rooted across the upstream and downstream of the industrial chain.

Against the backdrop of profound adjustments to the global trade landscape, maintaining the resilience and security of industrial chains and supply chains has become a core proposition for national coordination of development and security.

Supply-chain security not only concerns the autonomy and controllability of key links, but also involves the upgrading of industrial foundations, the modernization level of industrial chains, and the smooth effectiveness of the domestic large circulation. National strategies such as “Manufacturing Power,” “Rural Revitalization,” and “Digital China” place supply-chain capability building in key positions.

Pinduoduo’s “heavily investing in China’s supply chain” practices align with national strategies in a multi-dimensional way: by improving county-level commercial systems through the “packages into villages” initiative and strengthening rural logistics “capillaries,” it serves rural revitalization and expands domestic demand; by using data to empower the digital transformation of traditional industries, it responds to the requirements for developing “new-quality productive forces.”

In Baoji, Shaanxi, Fengfug County, the county-level logistics collective distribution and coordination center links up with 71 village-level stations. With over 100 packages processed per station per day on average, it is a microcosm of how corporate actions embed into national supply-chain infrastructure construction.

These moves reflect that Pinduoduo’s supply-chain investment has expanded from a purely commercial behavior into the creation of social value.

Pinduoduo also understands that the steady growth of its domestic and international businesses is fundamentally rooted in China’s complete manufacturing industry system.

As Zhao Jiazhen said in the financial report: “Over the past three years, Temu’s rapid growth is a key leap brought by the industrial dividend of China’s supply chain, and it has also created a new opportunity for upgrading and rebuilding China’s domestic supply chain. In 2026, China’s supply chain will enter a critical window period for transformation and upgrading.”

This is also a new opportunity for the company to push industrial belts toward branding through “New Pimpim,” helping Chinese manufacturing climb toward the middle-to-high end of the global value chain.

The road ahead and challenges

It needs to be noted that while the “New Pimpim” strategy has broad prospects, the challenges it will face cannot be ignored either.

Branding of the supply chain requires long-term investment, and as uncertainty in the global trade environment increases, it brings variables for cross-border business. In addition, the self-operated model will turn Pinduoduo from a platform player into a direct participant, facing more complex supply-chain management challenges.

However, based on the financial report data and strategic layout, it appears that Pinduoduo has already made preparations. As of the end of 2025, the company’s total cash, cash equivalents, and short-term investments amounted to RMB 422.3 billion, and ample cash flow provides solid support for its strategic transformation.

In the context of the era of big-country competition and industrial upgrading, Pinduoduo’s decision to put real money into heavily investing in China’s supply chain may explore a new path for the transformation and upgrading of China’s manufacturing industry.

From “RMB 100 billion subsidy” to “New Pimpim,” this strategic evolution is also an important chapter in the broader narrative of China’s economy transitioning from high-speed growth to high-quality development.