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As we all know, Costco has a rotisserie chicken that never increases in price. Even with inflation, it doesn't rise; during the avian flu outbreak, when the supply chain was in crisis, it still didn't increase. Not only that, but in 2020, they specifically invested $450 million to build a poultry plant in Nebraska, with one goal in mind—to save an additional 35 cents per chicken.
Craig Jelinek, who later became the CEO of Costco, once approached founder Jim Sinegal about the issue of hot dogs being sold too cheaply while he was still COO. The response was very simple:
“ _If you dare to raise the price, I will kill you. _ ”
It is said that this founder set a rule at Costco that the gross margin on products should not exceed 14%.
Walmart CEO Dong Minglun once accepted an invitation to speak at Tsinghua University. When answering questions, he mentioned that there are many new concepts in retail every year, but ultimately it boils down to three things:
Price, product, and experience.
Costco has a private label brand called Kirkland, covering over 550 categories, from nuts and coffee to batteries and suitcases. The selection logic is also very simple: the quality should not be lower than that of big brands, and the price should be 20% lower than similar products. With this strategy, in the fiscal year 2024, Kirkland's non-fuel product sales reached $56 billion, surpassing Coca-Cola's revenue.
Dong Minglun's logic has also been echoed by PDD. PDD aims to become a combination of Disney and Costco. In simple terms, it should be fun, cheap, and of high quality.
Recently, PDD also announced that it will enter the self-operated market, named &#34;New Pinduoduo,&#34; planning to invest 100 billion in the next three years to systematically incubate a batch of self-operated brands aimed at the global market.
Over the years, many platforms have tried to create self-operated brands, but none have made significant waves for various reasons. However, PDD has real advantages.
Take the supply chain, for example. PDD has always emphasized C2M, directly connecting to factories. Over the years, they have accumulated a large number of suppliers that were previously unknown but are now remarkably large.
The Longshan Industrial Zone in Cixi, Ningbo, Zhejiang, is a place that most people probably haven't heard of. But the cookware in your kitchen from Zwilling, Thermos, and Shark Ninja likely comes from a factory called Sanhe Cookware—one of the largest cookware exporters in the world and also a supplier for PDD.
Another example is Delixi Glass, founded in 1996, which is one of the earliest glass listed companies in the country, with over 50 production lines. IKEA, Carrefour, Walmart, and Metro are all its clients, with annual sales exceeding 1 billion. It is also on PDD's supplier list
These factories do not lack production capacity; what they lack is the path to sell their products. This is precisely another advantage of PDD.
PDD understands sales very well, or more accurately, it understands consumers very well. They have a data analysis team of over 200 people, two-thirds of whom do just one thing every day:
Analyze the millions of transactions that occur on the platform daily.
What price point for tissues sells well, which material of pots consumers are more sensitive to, which packaging specification has the highest repurchase rate... In short, if consumption had an algorithm, PDD has already figured it all out.
There is a tissue factory in Hunan called Kexinrou, which has been doing OEM for large supermarkets like Auchan and RT-Mart for years. Their craftsmanship is not bad, but they have always struggled to establish their own brand. Later, people from PDD approached them and suggested two changes: change the packaging to 28 packs per box and set the price at 29.9.
With just these two numbers, Kexinrou later achieved a single-day sales record of 3 million on PDD.
Don't underestimate the logic behind these two numbers—28 packs correspond to the monthly usage of an average household, making it sufficient for one purchase without overstocking; the price of 29.9 hits the psychological threshold of consumers who think &#34;not expensive but not cheap,&#34; providing a sense of quality without feeling painful. This is not just a random guess; it is a conclusion drawn from data. It's similar to Costco's pricing of $4.99 for rotisserie chicken.
You see, I told you that mastering mathematics is very important, right?
In addition, as a platform, PDD also has strong bargaining power. For the same product, a regular merchant might need to pay 100 for procurement, while PDD can negotiate down to 80. This logic is vividly demonstrated on Temu—Temu has completed in three years what PDD took ten years to achieve in domestic e-commerce.
So understanding the supply chain, understanding consumers, and having bargaining power—PDD has all these cards in hand; what it lacks is just a formal opportunity to enter the market.
Speaking of opportunity, I think there is another layer of meaning behind &#34;New Pinduoduo.&#34;
Chinese manufacturing has traveled a familiar path over the years: first doing OEM for others and earning hard-earned money; then gradually accumulating and starting to think about building their own brand, upgrading the industry, and improving product quality.
If everyone looks closely at PDD's development, it is actually repeating the same path. PDD has a slogan:
Heavy investment in Chinese manufacturing.
Since they are heavily invested, they cannot just stop at price wars. They need to help these factories sell their products globally while also taking their brands abroad—this is what the 100 billion aims to achieve.
These domestic products are gradually making their way overseas, such as labubu, Black Myth: Wukong, BYD... but it is still far from enough. The backpacks from Shaodong, beauty products from Yiwu, fishing gear from Weihai—factories in these places have produced world-class items, but in many everyday consumer sectors, the brands that everyone knows are still foreign.
What &#34;New Pinduoduo&#34; aims to do is fill this gap.
The student who once surrounded the city from the outskirts is now ready to enter the city for the exam.
Back then, the leader said that entering the city for the exam is not easy. Regardless of whether it is easy or not, one must enter the examination room, right?
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Shanghai has seen the emergence of an online Costco, and PDD plans to launch its own brand "New Pinduoduo" with an investment of 100 billion over the next three years, aiming to systematically incubate brands for the global market. Costco is known for its low prices and high quality, with its private label Kirkland achieving sales of 56 billion USD in the fiscal year 2024. PDD leverages its strong supply chain advantages, emphasizing the C2M model to connect factories and strives for success in the private label market

- Costco's strategy includes maintaining low prices for its rotisserie chicken despite inflation and supply issues, reflecting a commitment to value.  
- In contrast, Pinduoduo aims to establish itself with its own self-operated brands, emphasizing data-driven consumer understanding and strong supply chain connections, planning a significant investment in this venture.  
- The goal is to enhance the international presence of Chinese manufactured goods and premium brands, expanding beyond mere price competition in the global market.

Shanghai has launched an online Costco