As China’s largest agriculture platform, Pinduoduo connects 16 million farmers to our customer base of more than 800 million buyers. We are grateful that farmers and consumers have placed their trust in us, and we have pledged to use this scale to do good.
In Pinduoduo’s first annual sustainability report published last year, we laid out our goal of promoting digital inclusion so that local communities can reap the benefits of increased productivity and convenience and create value through new jobs and market opportunities.
The goal reflects our commitment to our core value of Ben Fen, to adhere to our principles and always do the right thing for the greater good. The question of how to create positive value for society and to be a responsible corporate citizen is integral to our corporate mission. We want to create meaningful, positive impact at scale.
Indeed, we made the following two points in our first letter to shareholders, published in July 2018 at the time of our IPO:
We think the e-commerce business is closely tied with social impacts and responsibilities, and therefore its growth and value should be shared with the public.
We envision Pinduoduo to be an organization that reports to the public. It should create value for the public, rather than being a show-off trophy for a few or carrying too much personal color. We want it to be an independent organization that brings value to the society with its unique organizational structure and corporate culture. Most importantly, it should continue to strive to better itself.
These principles continue to guide Pinduoduo and inform our day-to-day decision-making.
“We constantly think about how we can best measure our resources and reach to catalyze improvements and bring more benefit to society. Our direct access to over 800 million consumers and our understanding of them as well as the network of merchants on our platform, makes us uniquely well-positioned to bring top minds from around the world together to develop practical solutions to real-world problems that our users encounter every day.”
Chen Lei, Pinduoduo Chairman and CEO
In this year’s report, you will read about how our efforts to sow the seeds of growth through technology have impacted the lives of our farmers, merchants and other stakeholders.
The proliferation of the mobile internet has provided immense opportunities to bring more rural communities into the digital economy, not just as consumers of goods and services but also as providers of them.
As of Dec. 2020, there were 986 million mobile internet subscribers in China, representing 99.7% of internet users. Most first-time internet users would have gone online using their smartphones rather than desktop computers. Many of these digital novices reside in rural communities with limited or no access to desktop computing. The era of the mobile internet has opened up access to the digital world for a huge swathe of the population that coincidentally stands to benefit the most from the efficiencies brought about by plugging into the digital ecosystem.
We continue to drive digital inclusion in rural areas by equipping promising young talents with the necessary skills to set up their own e-commerce businesses, so that they can help their communities to market their local agricultural produce to a wider pool of consumers. With internet access and a smartphone, farmers in even the most remote areas can take part in online commerce, transcending the previous limits of geography.
One such example is Gu Lu Village in Sichuan province, perched on the edge of a precipitous cliff above the Dadu River Canyon, where villagers have seen their livelihoods improve after being connected by road and cable car in recent years.
The physical connection enabled not just easier access to the rest of the country, it also paved the way for digital connection. Today, the villagers are able not just to buy goods and services online, but also use e-commerce to sell local products such as walnuts and Sichuan peppers to consumers across China.
In less than a generation, one of the most remote villages in the country has achieved a remarkable transformation thanks to the investments in physical and digital infrastructure. Real-life examples like Gu Lu Village demonstrate the benefits of digital inclusion in driving higher living standards.
To spread these benefits to more people, Pinduoduo entered a strategic partnership with China Post in Sept. 2020 to promote rural-e-commerce, increase agricultural sales from remote areas, and improve livelihoods. As part of the cooperation, China Post will set up 150 bases within three years, giving those in the most remote areas access to a wider market.
Our efforts to promote social inclusion dovetails with our environmental sustainability goals given the strong linkages between food systems transformation and climate, nature, health and livelihoods.
Environmental Sustainability
The impact of agriculture on the environment has come under the spotlight in recent years, and the push is on to develop more ecologically friendly and sustainable methods for producing food.
Agriculture accounts for 70% of human freshwater consumption, chiefly through cropland irrigation, which has resulted in large-scale diversion of freshwater and the depletion of river systems and groundwater. A lot of agricultural land is devoted to pasture for cattle and other livestock, which are responsible for a large proportion of global greenhouse gas emissions, most notably methane. The intensive agricultural practices necessary to achieve the output to feed the growing population has meant the increasing use of synthetic fertilizers containing nitrogen, which pollute groundwater and river systems.
We seek to champion environmentally friendly and sustainable agricultural practices on several fronts. To protect the environment, we seek to reduce waste and promote efficiency and productivity by re-engineering the traditional agricultural and manufacturing supply chains. We also work with agronomic institutes and other centers of excellence to spearhead the adoption of more climate-smart agricultural practices that are suited to the needs of China’s smallholder farmers.
An important and integral part of promoting adoption is sharing knowledge and best practices. Pinduoduo has played an active role in hosting and organizing events to facilitate the sharing of knowledge. Through events such as the Food Systems Forum and Smart Agriculture Competition, we aim to promote the use of technology to raise productivity and optimize the use of resources. We also sponsored the First China Agricultural Robot Innovation Competition, where teams from universities, scientific research institutes and technology companies showcased their labor-saving innovations.
Pinduoduo also contributes to the knowledge base by working with leading institutions such as Zhejiang University and the National Engineering Research Center for Information Technology in Agriculture (NERCITA) to undertake scientific research and develop smart agriculture solutions. We also have partnerships with institutes like Singapore’s Agency for Science and Technology Research and Wageningen University of the Netherlands in the related fields of food safety, nutrition and agriculture.
On the ground, a partnership between Pinduoduo, the Chinese Academy of Engineering and Yunnan Academy of Agricultural Sciences is literally bearing more fruit. Under this pilot project, smart agricultural technologies such as drip irrigation, remote monitoring devices and pesticide-spraying drones were introduced for the first time to the region. The results have been encouraging.
Orange trees grown in a pilot at the Nujiang Duo Duo Farm use 15% less fertilizer and 30% less labor and are expected to increase farmers’ earnings 4,800 to 9,000 yuan per acre. We are looking forward to doing more.
Pinduoduo is focused on applying our expertise in complex systems design to cut our carbon footprint and that of the supply chain. Our approach is to streamline agriculture logistics and increase the efficiency of cold-chain logistics. By doing so, we aim to cut food waste and carbon emissions from transportation, two major contributors to agriculture-related greenhouse gas emissions.
In the first half of 2021, Pinduoduo received multiple patents for our proprietary logistics infosystem that, when fully implemented, will increase the efficiency of cold-chain logistics and allow better matching of local demand and supply of agricultural products. This is a work in progress that we are committed to seeing through and will back with the necessary resources and investments.
Corporate Governance
In the area of corporate governance, Pinduoduo implemented significant improvements to our governance structure earlier this year with the move to have one share, one vote. The decision to terminate the dual-class shares was the first of its kind, aligning the economic interest and voting power of shareholders.
In another unprecedented step, Mr. Huang delegated all his voting rights to our board, of which the majority are independent directors and elected annually. This prevents a scenario in which an individual or a small group of shareholders controls all the company decisions and ensures that the board is accountable to all stakeholders objectively.
As a young company that was started in 2015, we will strive to refine our processes and ensure that our operations remain robust, sustainable and beneficial to society.
At Pinduoduo, we will continue to work hand-in-hand with various stakeholders to introduce more technology and digitization to build an agri-food system where both people and the environment can thrive.
Harnessing Tech for a Greener Future. Using technology, we can make the agrifood supply chain more productive and efficient, reducing its carbon footprint.
Nurturing Communities Through Digital Inclusion. Sharing the benefits of the digital economy by connecting communities and facilitating the exchange of goods and ideas.
Strengthening Foundations to Go Further. Building a stronger, institutional organization that is accountable to all stakeholders.