The Prevention Of Corporate Financial Risks In The Context Of Fissionable Business Model Innovation: A Case Study Of Pinduoduo

With the booming of the Internet economy and the increasing consumption power of people,online shopping has gradually come into people’s sight and gained significant development.However,as the global market becomes more and more open,the competition between online shopping platforms becomes increasingly fierce.The growth rate of the number of users of online shopping in China is gradually slowing down,and the number of online shopping users is constantly matching the number of Internet users.The gradual slowdown in the growth rate of e-tailing has put forward new requirements for the development of comprehensive e-commerce platforms.The online shopping platform is facing an increasingly complex online environment and how to gain its own competitive advantage in the current market becomes an urgent issue to be solved.The company wants to stand firm in the increasingly fierce market competition will choose to improve their business model,will obtain significant competitive advantage through business model innovation,the company obtains long-term development of the driving force and core strength from the business model innovation and differentiation.The way to get the most revenue with the least investment is the most ideal and always sought business model for companies.However,in the process of business model innovation,the new business model embedded in the new business model has great instability,bringing more revenue but also causing a variety of immeasurable financial risks,the variability and complexity of the environment in the process of business model innovation,the diversity of stakeholders in the context of the Internet and the limitations of unique resources and functions,and many other factors combined to influence the business model innovation Inevitably,it brings financial risks.In order to truly achieve long-term stable and sustainable development,financial risks must be effectively identified and prevented based on the new business model.Pinduoduo has become the third largest e-commerce platform in China by taking a different approach to third and fourth tier cities through fission business model innovation.Although the change of business model has brought attention to Pinduoduo,it has also brought more pressure.In this paper,we intend to use literature research,case study and qualitative analysis to explore the business model innovation of Pinduoduo,a representative enterprise of e-commerce.Firstly,after systematically reviewing the existing research results of domestic and foreign scholars on business model,viral marketing model and financial risk theory,we clarify the logical relationship between business model innovation and financial risk,and build a financial risk transfer mechanism from the perspective of business model innovation.Secondly,based on the analysis of Pinduoduo’s business environment and innovation path,three components of business model innovation theory are selected:resource allocation,profitability enhancement and value creation,and the financial data from2017 to 2021 are analyzed to identify the financial risks of Pinduoduo’s business model and then analyze the causes.Finally,countermeasures against financial risks are proposed,taking into account the specificity of the company’s business model.The results of the study show that the fractured business model of sharing,grouping and low price disrupts the traditional e-commerce model and has unparalleled advantages,and that it’s the differentiated business model that has enabled the rapid growth of Pinduoduo’s competitiveness and become an accelerator for a successful IPO within three years.However,in the process there are many crises behind the fruitful results: high marketing cost and low operating profit,as well as single financing method,unbalanced debt structure,insufficient cash flow and weak credit risk,which ultimately affect the value realization and long-term development of the company.The purpose of this paper is to propose practical countermeasures for the financial risks in the process of business model innovation of Pinduoduo,which not only provides ideas to solve the problems arising from the change of Pinduoduo’s own business model,but also improves the ability of other e-commerce enterprises to identify and solve financial risks in the process of business model innovation.