Chinese agriculture platform Pinduoduo was named one of the top 10 innovative logistics companies in Fast Company’s 2022 annual rankings for its work on a new logistics system for handling agricultural products.
Pinduoduo operates an e-commerce platform that serves more than 850 million buyers and over 16 million agricultural producers. Its Duo Duo Grocery service matches orders and producers in the same geographical region to cut down on transportation time.
“Pinduoduo has re-architected China’s hub-and-spoke-style delivery infrastructure, with the help of third-party logistics providers, and built out new cold-chain transportation routes to eliminate unnecessary transit points, which slow down delivery, diminish freshness, and increase food waste,” Fast Company wrote in its citation.
The company has also been proactively investing in research and development to benefit China’s rural population and farmers, the publication noted.
Pinduoduo’s journey to becoming a leader in logistics has its roots in an early setback in 2015, back when it was an online fruit seller. Back then, the lack of a comprehensive front-to-end order fulfillment system led to the team missing most of its deliveries after an unexpected surge in orders and resulted in many customers receiving rotten fruits.
That episode highlighted the inadequacies of the fledgling company at that point in its development. It also laid bare the limitations of the logistics infrastructure, which was built to funnel parcels from tens of thousands of collection points to a centralized distribution system to maximize efficiency. However, what worked for transporting durable goods was also less suited for fragile agricultural products.
About half of China’s annual food loss and waste takes place soon after harvest when the agricultural produce is being processed, stored and transported, according to a study published in Nature. Minimizing the loss not only reduces the environmental footprint of agriculture, but it also boosts farmer livelihoods and improves consumer welfare through fresher food.
Since then, Pinduoduo has taken upon itself to develop a more flexible logistics infosystem and agriculture-focused infrastructure that reduces the need for multiple transshipments and enables more point-to-point deliveries.
The new agri-friendly logistics system is built on the back of advanced calculations that take into consideration multiple factors such as the timing of truck deliveries, warehouse location and route planning. Computing power has also advanced to the point where making sense of the vast amounts of real-time supply chain information is now technologically possible.