Source丨Snow Leopard Finance Classical economics holds that value is created by labor. Simply put, the price of a product is determined by its cost, which includes raw materials, labor, time, and other factors. When demand is insufficient, merchants typically reduce costs in various ways to compete with similar products at lower prices. As this intensifies, it evolves into inefficient homogeneous competition. This phenomenon is widespread on e-commerce platforms today, where merchants compete on low prices, even at the cost of "selling at a loss for publicity." However, low-price competition on homogeneous goods does not create new demand. In 1890, British economist and founder of the neoclassical school of economics, Alfred Marshall, proposed the theory of equilibrium price in his book "Principles of Economics," arguing that prices are determined by supply and demand, not labor. Homogeneous competition is essentially a mismatch of supply and demand: existing demand faces oversupply, while new demand goes unnoticed. So, in the current highly competitive e-commerce industry, is there still a "blank" area where demand is not fully met? Mismatched Supply and Demand In 2020, 8 out of 10 Chinese people shopped online. By June 2024, online shopping penetration had grown to 82%, an increase of only about 2% over more than four years, indicating that the demographic dividend in e-commerce has long peaked. Meanwhile, the growth rate of the overall online retail market has been slowing year by year. According to Ministry of Commerce data, in the first 10 months of 2024, physical goods online retail sales reached 10.3 trillion yuan, a year-on-year increase of 8.3%, with growth at a historical low. Research by iResearch shows that from 2022 to 2024, sales growth for comprehensive e-commerce during the 618 shopping festival fell from a year-on-year increase of 17.5% to a year-on-year decline of 6.9%. Live-streaming e-commerce sales growth also dropped sharply from 124% in 2022 to 12.1% in 2024. Image source: iResearch Against this backdrop, the e-commerce industry once fell into fierce price competition. The growth rate of product sales volume was far lower than the decline in product prices, leading some merchants to misunderstand this as "consumption downgrade" or "sluggish consumption." In contrast, other merchants have found a fast track to growth in the e-commerce red ocean. Quanzhou, Fujian, is known as the "China Shoe Capital," with an annual shoe industry output value exceeding 250 billion yuan and annual production of sports shoes exceeding 1 billion pairs. Jinjiang, a county-level city under Quanzhou, has given birth to many well-known domestic sports brands such as Anta, Xtep, and 361°, collectively referred to as the "Jinjiang system." In such a fiercely competitive city, the children's shoe brand "Big Yellow Bee" has raised its sales target by more than three times this year. Before the 618 shopping festival this year, Big Yellow Bee decided to increase its investment in Pinduoduo, expecting sales to grow from over 30 million yuan last year to 100 million yuan this year. Based on data from the first four months of this year, Big Yellow Bee is not far from achieving its annual sales target of over 100 million yuan. There are many merchants like Big Yellow Bee on Pinduoduo. An unexpected "spicy challenge" review made the Hunan Yiyang snack brand "Que Ya Chi" (Missing Teeth) go viral overnight. Founded in 2007, this snack company initially established a foothold in Yiyang with braised duck necks, chicken feet, and other delicacies. During the years when the e-commerce industry slowed down, Que Ya Chi entered a fast development track, with average annual sales growth exceeding 50%. In April 2025, Pinduoduo's "100 Billion Support" initiative launched the "Duoduo Good Specialty" program, and Que Ya Chi became one of the key supported brands. With platform resource backing, Que Ya Chi's daily sales now rank No.1 in the snack category on the 100 Billion Subsidy channel. iResearch's "2024 China E-commerce Market Research Report" shows that the overall Chinese e-commerce market has entered a bottleneck period, but consumer demand is becoming increasingly stratified and categorized. In particular, the demand for improved quality of life and corresponding category development is expected to provide diversified breakthrough paths for e-commerce platforms to expand new growth space. For merchants like Big Yellow Bee and Que Ya Chi, their counter-trend sales growth is not due to low prices. On the contrary, their products are not cheap, but they hit consumer needs and adapt to changes in market demand. Users do not lack demand; rather, homogeneous supply is tiresome and fails to stimulate consumption desire. For merchants, attributing the status quo to insufficient demand is a form of self-deception. Above White Labels, Below Brands When supply is used in the wrong place, it leads to homogeneous competition; when provided to those in need, it generates higher value. Pinduoduo is a platform skilled at maximizing supply-demand matching. The article "More Market or More Planning? Thoughts on Supply-Side Reform" explains Pinduoduo's early thinking on supply-demand matching. The earliest e-commerce mainly solved the problem of moving the Yiwu small commodities market online, accelerating market competition among various merchants by making distribution-side information highly transparent. However, upstream traditional manufacturing factories changed little; they still produced according to plans, relying on bulk orders from offline supermarkets, scheduling production cycles of several months, half a year, or even a year. "If we could make front-end consumers a bit more patient and willing to coordinate with others, giving up some of the impulse for immediate gratification, then we could use similarities in people-to-people recommendations, relationships, and interests to group people by kind, aggregating individual personalized needs into planned demand with a certain time buffer." Aggregating fragmented demand to create new demand, pushing supply-side adjustments, thereby reducing uncertainty and achieving more efficient resource allocation—this is one of the underlying logics of Pinduoduo's success. But as the overall e-commerce industry enters a bottleneck period, Pinduoduo's supply-demand theory also needs upgrading. Pinduoduo was once an important "distribution center" for white-label goods. White-label products offer high cost performance and can meet the needs of most people. Now, when universal demand no longer grows, personalized demand not only does not weaken but grows stronger, and such demand is unrelated to low prices. As consumer needs change, white-label products also need to "upgrade." Yizhifu is one of many white-label merchants in the hardware industry belt in Yongkang, Zhejiang. In 2020, Yizhifu joined Pinduoduo. At that time, frying pans priced at dozens of yuan were everywhere on the platform, but Yizhifu's 100-yuan per unit maifan stone frying pan quickly achieved daily sales of over 1,000 units. According to brand founder Zhou Zhiyu, the product sold well because, after detailed market research, it solved user pain points such as too-shallow pans and unreasonable handle design. Additionally, compared to nearly 400 yuan for similar products from well-known domestic brands, its price still offers high cost performance. Similar to Yizhifu, in Anxin, a small county in central Hebei known as the "Northern Shoe Capital," Wang Zhifu, who previously only did OEM for running shoes priced at dozens of yuan, tried listing a 100-yuan carbon plate running shoe for the first time. In Anxin, shoes priced above 100 yuan are rare. A dealer once said, "For the same shoes, if Jinjiang sells them for 200-300 yuan, I dare to take them; but if Anxin sells for 100 yuan, it's too expensive." Even Wang Zhifu's partner questioned, "Does this shoe really have a market?" But after listing on Pinduoduo, the first batch of nearly 2,000 pairs sold out quickly. Although priced higher than running shoes at dozens of yuan, compared to big-brand carbon plate running shoes costing 500-600 yuan, this product still offers excellent value. For Pinduoduo merchants, the concept of "price band" is increasingly valued—slightly more expensive than white labels, but cheaper than well-known brands. In today's fiercely competitive e-commerce industry, the price band above white labels and below brands remains a relatively blank area. Consumers still have a strong desire to buy products that meet their needs and are willing to pay a reasonable premium. For merchants like Zhou Zhiyu and Wang Zhifu, who can keep up with changes in supply and demand, this is an opportunity for brand upgrading and consumption "upgrading." True Long-termism For small and medium-sized merchants, seizing the opportunity for industrial belt upgrading requires both making good products and platform support. The casual men's shoe brand Bulls Family in Jinjiang did brand licensing for a long time, so it was listed as a licensed brand on Pinduoduo. To shed the licensed label, Bulls Family, on Pinduoduo's advice, focused on original design, launching creative elements like "double tongue" and "small schoolbag," and established a research and development center in cooperation with the local Quanzhou Liming Vocational University's School of New Materials and Shoe & Clothing Engineering for original design research. Over the past year, Bulls Family's total online sales across all platforms reached 600 million yuan, and this year's target is set at 1 billion yuan. Next, Bulls Family hopes to apply for Pinduoduo's black label for brand upgrading, aiming to become the "Anta" of casual shoes. Li Shixuan, a merchant from Wenshui, Shanxi, started his business in 2019. Wenshui, known for cattle and broiler farming, had no well-known meat product brands. "For the same pound of beef, neighboring Pingyao, with its national geographic indication, can sell for 90 yuan, while Wenshui can only sell for 60 yuan." Li Shixuan wanted to build a well-known brand for Wenshui. He applied for independent brands "Tuxiang" and "Aifei Fresh," and by becoming a Pinduoduo black label store and joining the 100 Billion Subsidy channel, he completed brand upgrading. This not only boosted sales of Wenshui meat products but also increased product repurchase rates by nearly 20 times, gaining a group of loyal customers. Whether it's affordable white labels or emerging brands, as long as they meet current consumer needs, they have the opportunity to seize rapid growth on Pinduoduo and enter the vast market of the "blank" price band through brand upgrading. The platform also plays a crucial role in this process. On one hand, knowing is easier than doing; not all willing industrial belt merchants can quickly discern changes in consumption trends. The rapid iteration of real demand at the market front far outpaces public perception. On the other hand, even if they see the opportunity, whether they can seize it is a great test of merchants' comprehensive capabilities. Since the second half of last year, Pinduoduo has successively launched the 100 Billion Reduction, E-commerce Westward Expansion, and New Quality Merchant Support Plan, providing targeted subsidies and traffic support to the supply side, and on April 3 this year announced the launch of the 100 Billion Support Plan. Pinduoduo believes that under the 100 Billion Support, a batch of new quality merchants will emerge. Their characteristics include actively embracing new channels and models, high operational efficiency, sufficient openness and initiative to discern consumption changes, ability to adjust production in a timely manner, and provision of products and services with competitive advantages, efficiently matching user needs. And the price band above white labels and below brands is where these new quality merchants' opportunities lie. As such merchants increase on the platform, Pinduoduo is no longer the "distribution center" for white labels in consumers' fixed impression, but a platform that can integrate more deeply with industrial belts, attract and screen more high-quality supply, and provide efficient supply-demand matching. In the short term, these real investments will inevitably sacrifice platform profits, but in the long run, they are the guarantee that Pinduoduo can continue to achieve extreme supply-demand matching. Whether in the past helping white-label platforms step onto the center stage of e-commerce, or now entering the blue ocean of the price band between white labels and brands, Pinduoduo's underlying logic remains consistent: discern demand, match supply and demand, thereby making growth long-term and sustainable. 🔺 Details of the 7th China FMCG Conference Scan code for ticket consultation