A product costing just a few Singapore dollars can now be ordered from China and delivered to Singapore without a separate shipping fee, even if it is the only item in the order. That is the proposition offered by Pinduoduo, a Chinese e-commerce platform operated by PDD Holdings, which also runs Temu.
Pinduoduo lowered its free shipping threshold for markets including Singapore from RMB 99 (USD 14.8) to just one item, regardless of price, Lianhe Zaobao reported on August 16. That means shoppers no longer need to add products to their carts simply to qualify for free delivery.
The move could encourage more online shopping, particularly among price-conscious consumers, said Chua Yeow Hwee, an assistant professor of economics at Singapore’s Nanyang Technological University. Such shoppers may also be willing to accept longer delivery times in exchange for lower prices.
The appeal may go beyond free shipping. Pinduoduo’s products can also be cheaper than those on competing platforms. But how does Pinduoduo keep prices so low, and who ultimately bears the cost of getting those products to consumers?
Is Pinduoduo cheaper than Taobao?
To find out, KrASIA compared prices for two products sold on both Pinduoduo and Taobao: a shampoo product from Head & Shoulders and the JisuLife portable bladeless neck fan.
For the 670-gram shampoo, Pinduoduo’s total price was SGD 7.52 (USD 5.9), compared with an estimated SGD 9.93 (USD 7.8) on Taobao. Even before accounting for delivery, Pinduoduo’s listed price was lower at SGD 1.03 (USD 0.8) per 100 grams, compared with SGD 1.30 (USD 1) on Taobao.
The JisuLife neck fan showed a similar difference. The “Diamond Black” model with a 4,500 milliampere-hour battery cost SGD 26.09 (USD 20.4) on Pinduoduo, compared with SGD 34.20 (USD 26.8) on Taobao. Both listings offered free shipping, while Pinduoduo also had an RMB 3 (USD 0.4) platform coupon available at the time of review.
Pinduoduo offered lower prices in both cases. There are limitations to the comparison, however. Taobao’s delivery charges for the shampoo were estimated using consolidated sea shipping rates, rather than confirmed at checkout. The final prices could also vary depending on promotions, coupons, and seller discounts.
Still, the shampoo comparison shows that at least part of the price difference existed before delivery charges were included.
How much do subsidies contribute to lower prices?
Like other e-commerce platforms, Pinduoduo offers coupons, credits, and promotional incentives that can reduce the amount shoppers pay at checkout. Some discounts may be funded by the platform, while others may come from merchants.
PDD Holdings’ financial statements show the scale of its marketing expenditure.
In 2025, the company’s sales and marketing expenses rose 12.6%, from RMB 111.3 billion (USD 16.6 billion) to RMB 125.3 billion (USD 18.7 billion). PDD attributed the increase partly to an additional RMB 13 billion (USD 1.9 billion) in advertising, promotion, and coupon expenses, according to its annual report. These figures suggest that promotions are an important component of PDD’s business strategy. They do not, however, reveal how much it spends subsidizing purchases.
There is another distinction: PDD’s financial statements cover its wider business, including Pinduoduo and Temu, rather than Pinduoduo’s cross-border operations alone. This makes it difficult to determine how much of the price difference between Pinduoduo and Taobao comes from platform-funded discounts.
Alibaba, which operates Taobao, also spends on promotions, but the two companies do not disclose directly comparable figures for the subsidies applied to individual orders.
How manufacturing partnerships help lower prices
Pinduoduo primarily operates as a marketplace, connecting consumers with third-party merchants rather than purchasing and reselling products itself.
One element of its approach involves working more closely with manufacturers to develop products around consumer demand. Often described as a consumer-to-manufacturer (C2M) model, this approach uses information about what shoppers want, including their preferred prices, to help producers decide what to manufacture. The aim is to develop products that better match demand, potentially reducing unnecessary production costs and eliminating some layers of distribution.
Zhejiang Sanhe Kitchenware, which sells cookware under the Sanho brand, offers an example of how this works.
In 2019, the manufacturer participated in PDD’s “New Brand Initiative,” a program designed to help manufacturers develop and market products for consumers on the platform.
At the time, Sanho’s cheapest cookware product was priced at RMB 199 (USD 29.8). But sales data from Pinduoduo reportedly indicated stronger demand for cookware priced below RMB 100 (USD 15). The two companies worked together to develop a nonstick pan priced at RMB 99, adjusting its design, materials, and production to meet that target.
According to a report by the 21st Century Business Herald, the pan had an ex-factory cost of RMB 93 (USD 13.9) before delivery expenses. Monthly sales subsequently exceeded RMB 2 million (USD 299,000).
The case illustrates two sides of Pinduoduo’s pricing strategy:
- For consumers, manufacturers can develop products at lower price points by adjusting specifications and production around demand.
- For manufacturers, access to a large customer base can generate higher sales volumes, although lower prices may leave less room for profit on each item.
PDD also benefits from scale. Higher sales volumes may allow merchants to spread certain production and operating costs across more orders, making competitive pricing more sustainable.
PDD’s merchant base grew from 15.8 million active merchants in 2024 to 16.8 million in 2025, according to its annual report.
How does PDD make money?
PDD does not need to procure a product and resell it for a higher price to earn revenue from a transaction. Instead, its Pinduoduo business relies largely on providing services to merchants.
The company has two main revenue streams: transaction services and online marketing services. Transaction services generate fees from services related to merchants’ sales. Online marketing services allow merchants to pay for greater product exposure, including placements in search results and browsing pages. Some advertising charges depend on the number of views or clicks a listing receives.
In 2025, PDD reported RMB 431.8 billion (USD 64.6 billion) in total revenue, split almost evenly between the two categories. Online marketing services and others generated RMB 217.8 billion (USD 32.6 billion), while transaction services brought in RMB 214.1 billion (USD 32.0 billion).
That balance continued into the second quarter of 2026. For the three months ended June 30, PDD recorded RMB 112.4 billion (USD 16.8 billion) in revenue, comprising RMB 57.6 billion (USD 8.6 billion) from online marketing services and others, and RMB 54.7 billion (USD 8.2 billion) from transaction services.
The company’s growing merchant base also supports these revenue streams. PDD attributed part of the growth in transaction service revenue to more merchants using its platforms and stronger demand for additional services.
This business model means PDD can earn revenue from merchant activity without relying on a markup on every product sold.
However, these are companywide figures, covering more than Pinduoduo’s cross-border business. They may show how PDD generates revenue across its platforms, but not how much it earns from a particular order.
Who pays for the discounts and delivery?
A product selling for SGD 3 (USD 2.3) does not necessarily cost SGD 3 to produce, market, process, and deliver. Those expenses have to be borne somewhere along the chain, whether by merchants, PDD, logistics providers, or some combination of them.
For merchants, offering products at lower margins can be a way to reach more customers and generate sales volume. The Sanho example illustrates how manufacturers may adjust costs and accept relatively tight margins to compete on price.
PDD can absorb part of the cost through coupons, promotions, and other consumer incentives. But it does not disclose how much of its marketing expenditure goes towards subsidizing individual purchases.
Then there is delivery. PDD’s cost of revenue rose from RMB 153.9 billion (USD 23.0 billion) in 2024 to RMB 188.8 billion (USD 28.2 billion) in 2025. The company said the increase was mainly due to higher fulfillment fees, bandwidth and server costs, and payment processing fees.
These expenses are incurred across its business. PDD does not disclose the fulfillment cost of a single cross-border order or how those expenses are divided between the platform, merchants, and logistics providers.
KrASIA also contacted sellers on Pinduoduo to better understand the economics behind these low prices, but those who responded declined to comment.
Is Pinduoduo’s cross-border business profitable?
PDD Holdings is profitable overall.
In 2025, it reported RMB 97.8 billion (USD 14.6 billion) in net income. In the second quarter of 2026, its net income attributable to ordinary shareholders was RMB 27.2 billion (USD 4.1 billion), down 12% from the same period a year earlier.
But profitability at the group level does not tell us whether its cross-border business makes money. The company does not separately disclose revenue, shipping costs, incentives, or profitability for specific overseas markets. Nor does it publish the economics of individual orders. This matters as a platform can earn revenue from transaction services and advertising across millions of merchants even if certain orders carry higher fulfillment or promotional costs than the revenue they generate.
PDD’s broader profitability therefore cannot prove that every low-cost order is profitable. Equally, the low price and absence of a separate shipping charge do not prove that the company loses money on each purchase.
The evidence points to several possible explanations for Pinduoduo’s low prices: promotions that reduce shoppers’ costs, manufacturer partnerships that help develop competitively priced products, and scale that can support higher sales volumes.
While the comparison with Taobao found lower prices for two products, it is not possible to determine which factor contributed most without comparable data on subsidies, merchant costs, and delivery expenses.
What can be established is how PDD generates revenue beyond the price of an individual item. What remains unknown is whether a particular cross-border order covers all its associated costs.
For shoppers, the price tag may be all that matters. For the merchants, platform, and delivery providers involved, the economics are considerably more complicated.
Note: RMB, SGD figures are converted to USD at rates of RMB 6.69 = USD 1 and SGD 1.28 = USD 1 based on estimates as of October 23, 2026, unless otherwise stated. USD conversions are approximate and, where appropriate, rounded for ease of reference. They may not fully match prevailing exchange rates.