In 2018, Pinduoduo generated significant attention within the investment world by securing $1.6 billion through a Nasdaq initial public offering, despite being only three years old. Chinese online consumers welcomed its emergence as a new option alongside established market leaders Alibaba and JD.com.

However, the company, established by former Google engineer Colin Huang, possesses objectives that extend beyond simply operating an e-commerce platform. It is responding to the Chinese government’s initiative to modernize the nation’s agricultural sector and strengthen its rural economy.

Many aspects of life in China have become highly digitized, including areas like commerce, entertainment, education, and healthcare. Yet, agriculture has largely remained untouched by this trend. A McKinsey report from late 2017 indicated that agriculture was among the least digitally advanced industries in China. Pinduoduo identified this opportunity and initially focused on selling produce online. It has since expanded into a full-scale e-commerce platform comparable to Alibaba, though agriculture “has consistently been a central focus for Pinduoduo from the very beginning,” stated Pinduoduo’s senior vice president, Andre Zhu.

“Investing in intelligent agriculture is a natural progression of our work and is driven by our commitment to promoting digital inclusivity.”

The company’s agricultural initiatives are not confined to a single department, but rather represent a company-wide and even societal undertaking. The strategy and investment team spearheads the effort to pinpoint solutions for all stages of agriculture that the company can help to expand. During implementation, the team collaborates with colleagues in operations to leverage their connections with local governments and traditional farms interested in adopting these technologies.

“Regarding the downstream distribution aspect, specifically e-commerce marketplaces for agricultural goods, I believe we currently hold a leading position compared to the rest of the world,” Xin Yi Lim, executive director of sustainability and agriculture impact at Pinduoduo, shared with TechCrunch in an interview.

In 2019, approximately 600,000 merchants utilized Pinduoduo to sell farm products, representing around 12 million farmers who supplied these merchants with their fruits and vegetables. In August, Pinduoduo committed to facilitating $145 billion in annual farm produce sales by 2025, a substantial increase from the $21 billion recorded in 2019.

“However, our primary focus is on encouraging and driving further investment in the upstream portion of the supply chain,” Lim added.

Consequently, the e-commerce giant is expanding its involvement throughout the agricultural lifecycle, from developing logistical infrastructure for distribution to providing farmers with essential marketing skills. In 2019, it provided training to nearly 500,000 farm operators through its online e-commerce business institute.

The e-commerce company is also working to accumulate agronomic knowledge for its agricultural suppliers. This year, it launched a smart farming competition, inviting teams from around the globe to cultivate strawberries using artificial intelligence and interconnected devices. Participants were evaluated based on factors such as fruit sweetness, resource utilization, and their AI strategy. The winning design will then be implemented at one of the AI-powered Duo Duo Farms, a collaborative project between Pinduoduo and the Yunnan provincial government, enabling farmers to sell directly on the e-commerce platform.

These instances represent only a small portion of Pinduoduo’s long-term agricultural strategy. The company does not disclose the specific amount it intends to invest in this area, but Lim stated that “compared to other industry participants, our involvement in agriculture is undoubtedly more extensive.”

The company also seeks investment prospects beyond China. While domestic companies offer more affordable hardware solutions, particularly drones and sensors, more sophisticated solutions related to crop modeling and forecasting are found in Western nations with large-scale commercial farms, Lim observed.

The adoption of agritech among Pinduoduo’s farmers remains “relatively limited” as the company’s smart farming initiative is still in its initial phases. However, the e-commerce newcomer may be favorably positioned to promote the advancement of agritech within China.

Unlike the United States and Australia, China’s agricultural landscape is characterized by numerous small-scale farms that often lack the financial resources to acquire advanced farming equipment. This limited demand has created challenges for agritech startups in securing funding for customer acquisition and price reduction, as Lim explained.

“Pinduoduo can readily connect [agritech startups] with a substantial customer base. This helps to alleviate some of the initial obstacles,” said Lim.

Furthermore, integrating technology into farming could contribute to retaining talent in China’s expansive rural areas, which are experiencing an outflow of young workers to larger, more prosperous cities.

“In the long run, we [aim] to make farming more efficient and accessible. This could potentially lead to a transformation in the entire structure of the farming industry. We might see young people considering farming as a viable entrepreneurial path, empowered by tools that give them greater control over their output,” Lim suggested.

“There is the potential for individuals who are not currently farmers to begin viewing farming as a feasible career option.”