Pinduoduo’s user growth skills!

1

The number of active buyers on Pinduoduo reached 419 million in 2018, which is less than that of Taobao but more than that of JD.com. It has firmly established itself as the second largest domestic e-commerce platform in terms of user scale.

Despite this, many Internet people and users within the Fifth Ring Road still hold many prejudices against Pinduoduo. Some people believe that Pinduoduo is full of counterfeit goods and that its users are all low-quality bargain-hunters, and thus refuse to use and understand the product. The existence of this prejudice is of no help in understanding Internet products.

The prejudice against Pinduoduo is actually related to our psychological perception of ourselves. Just as luxury goods can enhance consumers' self-image, not using Pinduoduo is their last stubbornness in maintaining their self-image as middle-class users within the Fifth Ring Road.

Recently, Internet celebrities such as Keso, Fenng, Caoz, and Big Player have expressed that they have become Pinduoduo users and like Pinduoduo. This is related to the fact that they do not need to reject Pinduoduo to maintain their self-awareness. Even using Pinduoduo and expressing their liking for Pinduoduo can make them think independently and show their attitude of not following the crowd better.

So, how did Pinduoduo, which is disliked by so many users within the Fifth Ring Road, grow? Can low-priced goods alone surpass JD.com and threaten Taobao so quickly in just three years?

2

Pinduoduo's growth is closely linked to one word, namely social fission. But after Pinduoduo, many other e-commerce platforms such as JD.com, Suning, Vipshop, etc. have also followed up with social fission strategies such as group buying, but why do the effects seem to be far inferior to Pinduoduo?

I spent nearly a month studying Pinduoduo's product operation strategies related to fission, and found that Pinduoduo used several principles to design dozens of nodes on the product for users to share. Pinduoduo’s sharing is no longer just for attracting new customers, it is also for promoting activity, repeat purchases, and returning traffic. Learning a set of principles for Pinduoduo’s sharing strategy is very helpful for understanding human nature and product operations.

3

Conclusion first, Pinduoduo mainly uses these principles to promote user sharing

• Gamification makes activities more fun
• Diversity to avoid user fatigue
• The activity is limited in time, giving users a sense of urgency
• User control, let users actively choose
• Lower the entry threshold to prevent users from losing too quickly
• To stimulate loss aversion, give users something first

4

Gamification

Pinduoduo's main online gamification operations now include Duoduo Orchard, Duoduo Love Elimination, Golden Pig Piggy Bank and Lucky Cat. We may find these games boring, but gaming entertainment and killing time are basic human needs, and it would be even better if some benefits could be gained in the process. For example, users can actually get the fruits grown in Duoduo Orchard for free. Users of several other games can also receive coupons, free products and other benefits.

Moreover, Pinduoduo can use each game to carry out a complete set of user operations. For example, stealing water drops in Duoduo Orchard can bring out the brand of the event, and obtaining these two types of game props, water drops and fertilizers, can be combined with operational purposes such as sign-in to promote activity, attract new customers, and promote repeat purchases.

5

Diversity

Nowadays, many people are already tired of supportive copywriting such as "Please help me cut the price" and "If you are a friend, please click for me". Excessive exposure of information makes users feel bored, especially since these activities themselves have the characteristics of "traps", which make users feel that the activities are easy to achieve and users are willing to participate and share, but operating costs need to be controlled, so Pinduoduo and other products have "cheated" many users in this process.

So just like magicians and liars, the methods of deceiving the audience's eyes need to be upgraded. In order to avoid being discovered, increasing the diversity of the gameplay and deceiving again is a good trick.

There are many types of gameplay on Pinduoduo that allow users to share. In addition to the most well-known ones, such as "Kan Yidao" and "Zhuzhu", there are also those that give users red envelopes but require the help of friends to scratch them open completely to get them, those that give users product fragments require friends to click to collect the fragments, those that give users red envelopes of more than 100 yuan but require help to collect 200 yuan before they can open them, and so on.

6

Event limited time

Limited-time activities can increase users' sense of urgency. The validity period of most activities on Pinduoduo ranges from 2 hours to 24 hours. The feeling that you have missed it after the time limit is very strong. Think about those stores in the county that have to close down every day to clear out their stock, and think about the crazy shopping sprees on June 18th and Double Eleven.

Pinduoduo has a detail that further increases the sense of urgency. Its countdown is not in seconds, but in tenths of a second, so the rapid scrolling of the numbers will subtly give users a stronger sense of urgency and affect user behavior.

Just like in fast food restaurants, the music played is usually fast songs with a strong sense of rhythm rather than soothing slow songs, because the owners hope that you will finish eating quickly and leave quickly so as not to affect their turnover rate.

When I was doing user research before, I also found that when users are downloading something, if you show them x% progress and x.yy% progress accurate to two decimal places respectively, when the speed is exactly the same, the latter user will feel that the download speed is faster and will feel less anxious and impatient while waiting.

7

User Controls

Many psychological experiments have shown that after people choose something, they will overestimate its value.

In many operational activities, Pinduoduo has added operations that allow users to choose. For example, the friend-recruiting activity to help users get free meals allows users to select cards to determine the number of users they need to invite, and the group-buying cashback activity allows users to determine the full cashback standard through drawing lots. Both of these activities give users a sense of control, making them feel that they are making their own choices and overestimating the value of their choices; at the same time, they add the factor of reward uncertainty, allowing users to gain a pleasure similar to gambling.

But in fact, these two activities do not really give users a choice. The actual activity standards are determined by the operation or related operation activity algorithms. However, the extra layer of packaging is effective in influencing user behavior.

8

Lowering the threshold

User participation willingness = expected benefits – expected participation costs

In terms of expected returns, Pinduoduo gives users enough incentives through the strategy of paying up to XX yuan or getting free goods. Although we know very well that most people cannot get it, first-time users don’t know this, and users in the sinking market also don’t understand it in the early stages.

In terms of expected participation costs, Pinduoduo lowers the threshold for participation in the early stages of an event, allowing users to receive timely feedback from participating in the event and making the event seem easy. For example, a typical bargaining activity will first give you a 40% off bargaining coupon, and activities such as scratching red envelopes and receiving cash allow you to scratch or receive part of the red envelope after the first few sharings.

But in reality, the thresholds for these activities have not been lowered in essence, and the control nodes still lie in how many old users you have helped Pinduoduo to become active and how many new users you have attracted. Even if you have completed 99% of your task progress by sharing it in the early stage, limiting the difficulty of completing the last 1% is still enough to control the cost of operating activities. The only difference is that Pinduoduo's event design method makes participating users feel that the event is simple from the beginning, and they are not likely to leave the event directly.

9

Loss Aversion

Loss aversion is a concept in behavioral economics. Some experimental studies have shown that the pain people feel when they lose money is equivalent to the joy they feel when they gain 2-3 times the amount. Because loss is so painful, putting people in a loss framework is more likely to motivate them to behave.

Pinduoduo will often give users a false sense of "gain", so if you do not participate in the activity and complete the task, it is equivalent to suffering a huge loss. Like the aforementioned Pinduoduo, which lowers the threshold for activities, you will feel from the beginning that you will get the goods/cash as soon as you complete most of the tasks, and if you don’t complete them, you will lose money.

A more typical example is an activity where you can receive cash every day. After users click on the activity, they will enter a page similar to WeChat red envelopes, prompting them that they have received 100+ red envelopes. However, when they receive the red envelopes, they will be prompted that they must have a total of 200 yuan before they can withdraw the cash. Would you play at this time? Those who understand Pinduoduo's tricks certainly won't play, but new users of mobile Internet in the sinking market should have a strong desire to participate, at least when they see the event a few times before.

10

Pinduoduo actually has many details in its products and operations that influence user behavior. For example, prompts such as other users’ successful group purchases and positive reviews are constantly displayed in rotation on the home page and product detail page. This is very effective in driving user trust and encouraging users to follow the crowd. This company's product and operational capabilities are indeed strong and worth learning from.

In addition, from Pinduoduo's boss Huang Zheng, who graduated from Zhejiang University and Google, you can see from his public account articles and external speeches after the listing that he knows what he is doing very well. It is also very admirable that he was able to break out when everyone believed that there were no big opportunities in the domestic e-commerce market except Taobao and JD.com.

Pinduoduo's model of influencing the supply side by gathering a large amount of consumer demand is also very innovative. It has brought consumption upgrades to consumers outside the Fifth Ring Road and created new opportunities for the development of domestic manufacturing and agriculture.

11

Brand pavilions and 10 billion yuan in subsidies penetrate into the inner fifth ring road

However, many of Pinduoduo's problems have gradually become apparent, such as its operating model. Yes, as I analyzed before, it really understands people, especially users in the sinking market, and is very effective. But after all, many activities are suspected of misleading and "deceiving" users. Pinduoduo's C2M model relies heavily on economies of scale, and it needs to quickly capture users before Taobao and JD.com can react in time, so I can understand this early strategy of acquiring users in a "smart" way.

Now, Pinduoduo's active user growth has encountered certain obstacles, which are largely caused by the problem of how to break into cities in the process of surrounding cities from rural areas. The brand pavilion and the 10 billion yuan subsidy should have some effect, because they provide products that users within the Fifth Ring Road need more. At the same time, the low prices of rigid-priced standard products like Apple are attractive to all users. Perhaps they can slowly free Pinduoduo from counterfeits and low brand awareness.

12

Changing cognitive dissonance

Although changes have gradually taken place, if Pinduoduo wants to use social fission to achieve rapid penetration and growth within the Fifth Ring Road, they must abandon path dependence in their operational strategy.

Many people are talking about the issue of personal setting in the circle of friends. In fact, it is not only in the circle of friends, everyone has a "self-personality" in their hearts. This personality is revealed through behaviors such as what people like and what products they use. Because Pinduoduo's brand image in the minds of users within the Fifth Ring Road is still so bad, many people will encounter strong psychological conflicts and discomfort when using it. This discomfort is called "cognitive dissonance" in psychology.

Because they think that Pinduoduo is a place where cheap, fake, and low-quality goods are rampant, and if they use the brand used by users outside the Fifth Ring Road, they will form negative perceptions such as being greedy and cheap, which is inconsistent with their self-image.

To change this dissonance, users must change their cognition. Pinduoduo needs to establish that using Pinduoduo is a smart consumer behavior, or Pinduoduo is helping China's manufacturing industry and fruit farmers, and using Pinduoduo is promoting domestic manufacturing and agricultural progress. When it comes to sharing and social activities, it is a better choice to link them to charity rather than offering small favors, so that the output from every user's purchase or participation in game operations can be used for charity.

These changes will reduce or even completely reverse the cognitive dissonance felt by users within the Fifth Ring Road when using Pinduoduo.

Author: Watson's Black Mirror

Source: Watson's Black Mirror