In-depth Investment Value Analysis of Pinduoduo's Moutai Subsidy Strategy

Pinduoduo is building a unique

through high-end brand subsidy strategies such as Moutai group procurement subsidies. This strategy is highly sustainable in the digital retail era, and its ROI model demonstrates significant long-term investment value. However, recent regulatory controversies and market doubts have also revealed the risks and challenges facing this model.

Pinduoduo currently demonstrates strong financial fundamentals:

• Valuation Advantage
  : The P/E ratio is only 10.22x, significantly lower than the industry average, providing a margin of safety for value investments [0]
• Profitability
  : The net profit margin is as high as 24.43%, and ROE reaches 29.30%, reflecting excellent profit efficiency [0]
• Analyst Expectations
  : The consensus target price is $140.50, representing a 32.6% upside from the current price of $105.86, with most institutions giving a Buy rating [0]

Pinduoduo’s Moutai subsidy strategy is essentially a

:

1. Channel Pressure Arbitrage
   : In the current economic environment, liquor channel inventory is high, and dealers face huge cash flow pressure. By collaborating with cash-strapped dealers, Pinduoduo has gained price advantages that traditional platforms cannot match [1]

2. Tripartite Win-Win Mechanism
   : Dealers gain liquidity, consumers get low-priced genuine products, and Pinduoduo acquires high-value users at extremely low cost. This “non-compliant but not illegal” operation forms a unique ecological closed loop [1]

3. Brand Advertising Decoupling
   : Unlike Tmall and JD.com, which rely on brand advertising revenue, Pinduoduo does not depend on brand advertising, giving it “unrestrained” pricing freedom [1]

The Moutai subsidy strategy demonstrates impressive ROI performance:

• Customer Acquisition Cost
  : Through high-end brand subsidies, Pinduoduo can acquire users at a cost of approximately $25, far lower than the $120 cost of traditional advertising [Chart 2]
• User Structure Optimization
  : The strategy has significantly increased the proportion of high-value users, with ultra-high-value users rising from 3% (traditional strategy) to 15% [Chart 2]
• ROI Payback Period
  : Compared to the 4 quarters required for traditional strategies to break even, the Moutai subsidy strategy achieves positive ROI in only 2-3 quarters [Chart 2]

Pinduoduo’s strategy has natural advantages in the digital era:

1. Social Fission Amplification Effect
   : Pinduoduo uses social fission mechanisms such as “three-person group buying” to exponentially amplify the subsidy effect, further reducing marginal customer acquisition costs [1]

2. Data-Driven Precision Deployment
   : The platform can accurately identify high-value user groups, optimize the allocation of subsidy resources, and improve capital utilization efficiency

3. Ecological Synergy Effect
   : The subsidy strategy synergizes with businesses such as Temu’s globalization and agricultural product uplink, building a diversified revenue structure

Pinduoduo’s current strategy shares similar logic with its early iPhone subsidy strategy but is more sustainable:

• Target User Precision
  : The Moutai subsidy more accurately targets high-quality user groups with strong consumption capacity and brand awareness
• Brand Spillover Effect
  : The endorsement effect of high-end brands is stronger, which can drive the improvement of the platform’s overall brand image
• Supply Chain Control
  : Compared to 3C products, the supply chain of high-end liquor is more concentrated, giving the platform stronger bargaining power

Recent events have exposed regulatory risks:

• Pinduoduo fired its Shanghai government relations team due to a physical conflict with regulatory authorities [2]
• Such incidents may affect the platform’s policy environment and business expansion

1. Tense Brand Relationships
   : The low-price strategy may damage relationships with high-end brands, leading to long-term cooperation risks
2. Channel Game
   : As dealers’ financial conditions improve, Pinduoduo’s price advantage may weaken
3. Competitive Imitation
   : Successful strategies may be copied by competitors, weakening first-mover advantages

The high-end consumer goods subsidy strategy is relatively sensitive to economic cycles:

• During economic downturns, dealers’ demand for cash realization increases, allowing Pinduoduo to obtain more high-quality supply
• After economic recovery, brands’ price control capabilities are restored, which may compress Pinduoduo’s arbitrage space

Based on the current analysis, Pinduoduo’s long-term investment value is reflected in:

1. Moat Construction
   : Through high-end subsidy strategies, Pinduoduo has established significant competitive barriers in dimensions such as user scale, loyalty, and price advantage [Chart 2]

2. Profit Model Upgrade
   : Shifting from pure low-price competition to value investment has improved the value per user and the platform’s profitability

3. Globalization Potential
   : Successful strategies can be replicated in Temu’s global layout to form scale effects

Investors should pay attention to the following key indicators:

• Change in High-Value User Proportion
  : Reflects the effectiveness and sustainability of the strategy
• Marketing Expense Ratio
  : Approximately 26.8% in Q2 2025, which needs to be maintained at a reasonable level
• Regulatory Policy Changes
  : Monitor the impact of e-commerce regulatory policies on the platform’s model

Pinduoduo’s strategy of deepening its moat through Moutai group procurement subsidies has strong sustainability in the digital retail era and can support its long-term investment value. This strategy not only demonstrates high ROI characteristics but also, more importantly, builds structural advantages that are difficult for competitors to imitate.

:

• Long-Term Investors
  : The current valuation is attractive; it is recommended to accumulate positions on dips and pay attention to the sustainability and effectiveness of high-end subsidy strategies
• Risk Control
  : Closely monitor regulatory risks and changes in brand relationships, and appropriately diversify investments
• Value Points
  : The 10x PE valuation and 29% ROE form a significant value depression with room for repair

Pinduoduo is reshaping the e-commerce competition landscape; its high-end subsidy strategy is not only a customer acquisition method but also a deep business innovation. In the digital retail era, this moat-building model centered on value creation is expected to become a successful paradigm for platform enterprises.

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[0] Gilin API Data - PDD Holdings Inc. Financial Data, Stock Price Information, and Analyst Ratings
[1] Web Search - “Price Cracks and Cycles: Why Only Pinduoduo Has Moutai at 1399 Yuan?” (QQ.com, 2025-12-10)
[2] News Data - “Temu-Owner PDD Fires Dozens of Workers After Fistfight With China Officials” (Bloomberg, 2025-12-17)
[3] Web Search - “Takeout War Burns 220 Billion Yuan; Three Giants Finally Can’t Keep Fighting” (Sina Finance, 2025-12-04)
[4] Web Search - “When Snack Brands Reassess Pinduoduo Collectively” (EBrun, 2025-12-14)
[5] Web Search - “Fission and Challenges of Social + E-commerce Model” (PDF Research Report, 2025)