How strong is Pinduoduo’s execution?

The following are excerpts from an article published in Chinese. The author, Dongqi Yu, is a renowned business commentator. The views and perspectives expressed in this article are NOT those of Momentum Works; nonetheless, we find them interesting and worth sharing.

You can refer to Momentum Works’ “Who is Temu” report for structured analysis and insights about Pinduoduo. You can also read our book “Seeing the Unseen: behind Chinese tech giants’ global venturing” for more case studies, analyses, and reflections. 

This is the 1st of the three-part series, which includes the following: 

• How strong is Pinduoduo’s execution?
• Why is Pinduoduo’s execution so strong?
• Why is it hard for other companies to copy from Pinduoduo?

Read on! 

 

A conversation with a friend from Pinduoduo left a deep impression on me. It was after this chat that I realised just how powerful Pinduoduo’s execution is. In most companies, when we talk about strong team execution, we generally refer to two aspects:

First, team compliance, where the senior management’s will is implemented effectively.

Second, team dedication, where a large amount of work is done quickly, and well.

Pinduoduo’s strong execution also hinges on these two points, but the extent is on another level. 

1. Team compliance

To ensure team compliance, general companies emphasise “execution,” but Pinduoduo uses a term called “rigid execution” (刚性执行). This means absolute obedience, non-negotiable.

What does this “rigid execution” in the team cover?

• Strategies and key tactics set by senior management must be followed.
• Sometimes, plans decided on the spot by managers must be followed.
• Even adjustments in an employee’s role by a manager must be followed.

In Pinduoduo, it’s common to see the following scenario:

In most companies, teams are seated by department – the product department sits together, the operations department sits together, and so on. 

But not in Pinduoduo. To ensure communication efficiency in business operations, Pinduoduo often has product, operation, product development, and testing personnel of a particular project sitting together. 

This has an impact on the team; a product manager, though still in the same role, may have to move their workstation if they switch tasks. In Pinduoduo, it’s common for a manager to realise that a certain task is more important, tell an employee about it, and the next day they move to a new desk after a brief handover. 

Such adjustments happen frequently in Pinduoduo. And there are more extreme cases. 

In 2020, when Pinduoduo started its community groupbuy business Duoduomaicai, they needed to expand business in various provinces, requiring “provincial heads.” These “provincial heads” would be in charge of and based in their respective provinces. 

Most of Pinduoduo’s appointed “provincial heads” were its senior employees. But the company’s headquarters is in Shanghai. Before the community groupbuy business, these employees were based in Shanghai. Being assigned as a “provincial head” meant not only taking on a completely new task but also leaving Shanghai to be stationed in an unfamiliar province. 

Normally, you would expect there should be some sort of competitive selection process for these “provincial heads,” – to figure who participates and who is willing to relocate. 

But at Pinduoduo, most of these “provincial heads” were directly appointed by senior management. Most of them accepted their appointments. 

They had a few days to recruit key managers to form their teams, and then they would immediately leave Shanghai for their designated provinces. They would then start the hectic process of finding warehouses, sourcing products, and recruiting group leaders, possibly without a chance to return home for a considerable time.

Many companies emphasise execution. But absolute obedience to this extent is indeed rare.

 

2. Team dedication

Since its inception, Pinduoduo has been following a 996 work schedule. The employees only rest on Saturdays, and on other workdays, they generally work over 12 hours. On release days, they might even work through the night. 

In general companies, with such long working hours, employees are often exhausted, with diminished mental capacity. Development teams will see an increase in bugs, and the creativity of operations teams will decline. 

However, Pinduoduo manages to convert the lengthy working hours of its employees into effective workload.

In the community group buy business, Duoduomaicai, they take pride in a particular achievement: a technical project that took their main competitor half a year to develop was completed in just three weeks, by a smaller team.  

According to friends who have worked at Pinduoduo, the efficiency of their warehouse, including picking and dispatching goods to group leaders, was at one point 1.8 times higher than their best-performing competitor. 

Pinduoduo’s growth team also delivered top-notch industry performance. It’s said that Pinduoduo and ByteDance’s growth capabilities are among the top three globally. 

Pinduoduo’s achievements also validate this notion, as they have seen steep growth curves in various segments including Pinduoduo (ecommerce), Duoduomaicai (community group buy), and Temu (cross-border ecommerce). 

Pinduoduo’s foray into short videos (多多视频) also achieved breakthrough success, reaching 150 million daily active users in less than two years.

It’s challenging to maintain high work quality and creativity when the team works long hours. 

The previously mentioned absolute obedience, to the extent of accepting new assignments and relocating from Shanghai within a few days, is also hard. 

Achieving both these aspects simultaneously is even more difficult. 

The reason is simple: obedience and proactive effort are naturally contradictory states. 

If employees are expected to be proactive, hardworking, and accountable for results, they need autonomy – they can’t be micromanaged.

If the boss still exerts pressure and demands obedience, the team might superficially accept it but would feel extremely resentful internally. 

They might think: “Who is actually doing this – you or me? You’re not on the front line, how can you make good decisions impulsively?” 

But somehow, Pinduoduo has managed to achieve both. 

They not only make their team follow management directives but also take up the manager’s vision as their own, striving to create surprising outcomes. 

This is an ideal state for any manager. 

How Pinduoduo manages to achieve this is a significant question. 

We will deep dive into this in the upcoming articles – stay tuned!