People are often impressed by the speed, efficiency and cost effectiveness of China’s ecommerce logistics network, which shipped more than 150,000,000,000 parcels nationwide last year.
However, China is a vast country with a lot of remote and sparsely populated areas, often with difficult terrains.
This is an excerpt of a report on how Pinduoduo enabled ecommerce free shipping in Inner Mongolia, a vast province bigger than Japan, France and Germany combined, but with a population much smaller than that of Malaysia.
It is an interesting case study and might provide some inspiration to logistic planners in other vast countries or regions. Note that the opinions expressed here are those of the author, not of Momentum Works.
Enjoy reading!
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For years, Inner Mongolia remained one of the last frontiers untouched by China’s “free shipping” revolution. Harsh winters, vast empty landscapes, and scattered rural populations made the region a logistical challenge for ecommerce platforms. Today, things have changed—and Pinduoduo played a central role.
A Remote Market Once Considered Too Expensive
Inner Mongolia’s geography is as diverse as it is difficult. From deserts and grasslands to frozen forests in Genhe—the so-called “cold pole of China”—delivery routes are often measured in hours rather than kilometers.
Temperatures in parts of the region plunge below minus 50 degrees Celsius during winter, adding seasonal risks to already thin logistics coverage. For years, the region remained a blank spot on the national logistics map for ecommerce.
In early 2024, Inner Mongolia’s “non-shipping” rate (the percentage of attempted orders that cannot be fulfilled or delivered to a given address) was still above 3.5%, much higher than the under 0.2% in major coastal areas.
Despite this, ecommerce demand has grown rapidly. In just two years, the region’s annual parcel volume more than doubled, from 2.4 billion items in 2022 to 5.77 billion in 2024. Local governments responded by investing in logistics infrastructure, including regional sorting hubs, trunk line networks, and so-called “ecommerce cloud warehouses”(i.e. shared storage and fulfillment facilities). But infrastructure alone could not solve the last-mile problem.
Pinduoduo’s strategy
Pinduoduo began investing in Inner Mongolia’s logistics network in 2022—not by building its own fleet, but by re-engineering the structure of parcel movement from merchants to consumers.
The first step was the establishment of regional transit warehouses in cities such as Xi’an and Shenyang. These warehouses act as centralised collection points where merchants from across the country can send goods, which Pinduoduo then redistributes across more remote regions through an optimised, consolidated route network.
The more decisive move came in 2024, when Pinduoduo eliminated cross-region transit surcharges for parcels destined for remote areas, including most of Inner Mongolia. This effectively turned a patchy “sometimes ships” region into a true “free shipping” zone for many users. The platform absorbed the cost difference—an aggressive, volume-first move consistent with Pinduoduo’s approach elsewhere in the country.
In 2025, Pinduoduo launched its own version of last-mile infrastructure: Duoduo Stations. These small-scale, franchised delivery points are now active across many towns and counties in Inner Mongolia.
Rather than build these from scratch, Pinduoduo partnered with local operators, offering subsidies of ¥0.05 to ¥0.12 per parcel, as well as guaranteed minimum monthly incomes—typically around ¥3,000—for couriers in low-volume areas.
Another important piece of the strategy was the adoption of a “shared delivery” model. Couriers no longer deliver just Pinduoduo parcels; they now combine items from multiple platforms, such as JD, Cainiao, and even local retailers.
This consolidation has lowered delivery costs by up to 80% and reduced time delays by nearly 20%, according to reports from multiple counties.
The benefits are two ways
Between May and September 2024, the region’s non-shipping rate dropped from 3.57% to just 1.38%. Local delivery volume jumped, with some couriers reporting a 17% increase in workload following the new subsidy model. Residents can now expect timely arrivals of everything from dish soap to smart home devices.
More importantly, rural producers have started to benefit. Local goods such as pine nuts, venison, and handcrafted items are increasingly reaching national buyers via Pinduoduo’s platform. With shipping costs no longer a barrier, many small businesses in Inner Mongolia are experiencing their first taste of scalable ecommerce distribution.
Pinduoduo’s strategy has not gone unnoticed. Rival platforms including Taobao, Kuaishou, and Douyin have since rolled out similar subsidy programs in neighboring provinces. However, Pinduoduo retains a first-mover advantage in many areas, particularly where Duoduo Stations have already taken root.
The battle for last-mile delivery infrastructure in rural areas is becoming one of the most important fronts in China’s ecommerce expansion. In Inner Mongolia, Pinduoduo’s approach has offered a playbook for how to make “free shipping” work in places where it once seemed impossible.
This model, if proven scalable, may redefine how platforms compete in other remote or underserved markets—within China and possibly beyond.
The post How Pindudouo enables free shipping in the Gobi Desert first appeared on The Low Down - Momentum Works.
