This article is a translated excerpt of a blog post posted on Photon Planet. Please note that the opinions expressed here are of the author, not of Momentum Works.
In general, we know that Chinese ecommerce platform Pinduoduo (which also operates Temu internationally) has been very disciplined on NOT building its own logistics. However, the company is familiar with running fulfillment capabilities, having built its next-day delivery grocery community groupbuy platform Duoduo Maicai.
The entry of Pinduoduo in last mile parcel delivery stations is an interesting part of the evolving ecommerce logistic landscape of China, where 150 billion parcels are sent annually.
In China’s ongoing war for dominance in e-commerce and logistics, the focus in 2025 has shifted decisively to the “last mile”—specifically, the network of community parcel stations (驿站) that serve as key delivery and pick-up points for consumers.
These stations, once the quiet domain of traditional express delivery companies, have become the new frontline for competition between two ecommerce giants, pitting Pinduoduo against Alibaba.
Historically, parcel stations were operated by express logistics companies like ZTO, YTO, and Cainiao. ZTO and YTO tried to turn their parcel stations into convenience stores, such as ZTO’s Tuxi Life Service Center. Cainiao took it further, branding its stations as “digital community life services” and offering home cleaning and laundry add-ons.
However, as ecommerce platforms seek deeper access to consumers, they don’t want to solely rely on third-party delivery partners. In 2025, Pinduoduo rebranded its parcel collection service under Duoduo Maicai as “Duoduo Station”, offering both pick-up and home delivery. Simultaneously, Cainiao’s last-mile business was transferred and fully integrated into Alibaba’s Taobao/Tmall Group, emphasizing its importance in the ecommerce group’s broader ecosystem.
Pinduoduo’s strategy: subsidies with precision
Pinduoduo’s strategy is marked by four key tactics:
- Preferential parcel allocation to its own stations;
- Providing per-package subsidies (RMB0.05–0.12 yuan/USD $0.01-0.02) to parcel stations;
- Strong focus on lower-tier (3rd- and 4th-tier) cities;
- Targeted cooperation with franchisees of major courier networks such as STO, YTO, ZTO, and J&T.
These efforts are not only about generous handouts. In areas with low daily parcel volume, Pinduoduo combines per-parcel subsidies with daily minimum guarantees, raising monthly station income by as much as RMB3,000 yuan (USD $415). In some agricultural regions, Duoduo Stations now account for over 25% of total parcel volume.
Pinduoduo’s comeback also revives the shared delivery model (共配), where a single third-party operator delivers packages for multiple courier brands in rural areas. Because of its efficiency and cost-effectiveness, shared delivery is especially widespread in China’s remote regions especially in the West.
In addition, since Western China has weaker logistics infrastructure and higher fulfillment costs, Pinduoduo pioneered centralized forwarding and free shipping to remote provinces like Tibet, Qinghai, and Gansu.
These moves reduced costs for merchants and enabled many to open sales to western markets for the first time, driving new order growth from underpenetrated regions.
In all, Pinduoduo’s subsidy model isn’t just about stations—it’s about controlling fulfillment in underserved areas, which is key to unlocking China’s next wave of e-commerce growth.
Alibaba’s response: restructuring and tech-driven efficiency
When Pinduoduo’s parcel volume surpassed that of Taobao/Tmall in 2023, Alibaba began repositioning parcel volume as a key performance metric. Cainiao’s stations were linked to other Alibaba initiatives like Baba Farm（a gamified feature on Taobao where users receive real fruits delivered to their homes when the virtual trees mature), expanding their role from simple delivery points to ecosystem touchpoints.
Cainiao’s prior monetization attempts included:
- Smart LED indicator strips for self-service pick-up,
- Advertising partnerships,
- Collection services via Baba Farm,
- And shared customer service support for rural operators.
But these efforts largely failed to gain traction, especially as Alibaba’s centralized control over logistics alienated third-party courier franchisees, many of whom pivoted to Pinduoduo.
Alibaba’s strength—ecosystem integration—has become a double-edged sword. Its heavy-handed logistics model leaves little room for independent players, driving them into Pinduoduo’s open arms.
While Pinduoduo and Alibaba battle fiercely, JD.com is quietly building a three-tier delivery system in places like Xi’an, involving dedicated JD collection stations, pickup partner stores and township-level agents.
Instead of engaging in a subsidy war, JD focuses on investments in infrastructure, betting on long-term service reliability which will position itself as the high-trust, high-efficiency logistics provider.
In essence, the parcel station has evolved from a utility node into a strategic platform battleground. Whether through heavy subsidies (Pinduoduo), ecosystem integration (Alibaba), or operational stability (JD), all players now view the “last mile” as a direct proxy for platform strength and user retention.
As China’s digital retail landscape matures, whoever controls the last mile may ultimately control the market.
[MW note: we find this conclusion peculiar – the market is much more nuanced to allow such a simplistic narrative.]
