Pinduoduo steps up R&D spending with eye on agriculture sustainability

Pinduoduo is stepping up its research and development (R&D) spending as it invests in science and technology to make farming more environmentally sustainable.  

R&D spending rose 34% in the third quarter from a year earlier to 2.4 billion yuan ($376.0 million), the highest level since IPO, according to the company’s quarterly results announcement.

“We are placing more focus on investments in R&D, away from the previous emphasis on sales and marketing in our first five years,” said Chen Lei, Pinduoduo Chairman and Chief Executive Officer. “We want to leverage our strength in technology to deepen our digital inclusion efforts in agriculture.”

Pinduoduo has been deeply rooted in agriculture since its establishment in 2015. The company has become the largest agriculture platform in China, connecting 16 million farmers to its 867.3 million consumers. Even so, there is still “much more” for the company to do in agriculture, especially with technology, said Chen. “Therefore, we plan to deepen our investment in tech-enabled agricultural solutions, to address critical needs in this sector,” he said.

Pinduoduo’s increase in R&D spending comes as technology takes on an increasingly important role in upgrading productivity and efficiency in the agriculture sector. Globally, farming is undergoing a wave of transformative change as technology automates repetitive and labor-intensive tasks. Technology is also improving the precision of the growing process, cutting excessive use of fertilizer and other inputs that can harm the environment.

One area that Pinduoduo has seen encouraging results in is logistics. Since investing in building out a more responsive, affordable, and sustainable logistical system, the company has seen a reduction in delivery times and food waste and loss. This was achieved through technology solutions like route planning, advanced analytics, and cold-chain optimization, Chen said.

Another area is precision farming. Pinduoduo started an annual Smart Agriculture Competition with the aim of demonstrating the positive impact that precision farming techniques can have on farm output and environmental sustainability. Participants in this year’s competition have to adopt a multidisciplinary approach and apply nutrition science, precision farming, and other horticulture technology to produce tomatoes. Pinduoduo is also making efforts in talent development in the agriculture sector. To enable farmers to sell and grow better, the company is training more growers on how to run e-commerce businesses, as well as encouraging young talent to consider a career in agriculture.