How to attract 600 million low-end users?

In 2019, the concept of sinking markets was extremely hot. Looking at the sinking markets, the industry outlook therein is also worthy of our attention and consideration. At the same time, the author also took JD.com as an example to analyze how the number one player is attacking the sinking market.

Inside the insignificant "Five Rings" and outside the boundless "Five Rings".

Recently, with the popularity of the new retail concept, the "down-market" has received more and more attention from the Internet industry. Especially after the success of products represented by Pinduoduo, Qutoutiao, and Kuaishou, the vast market "outside the Fifth Ring Road" has become a new gold mine. Why the “downstream market”?

The "downstream market" mainly refers to "downstream users", which refers to mobile Internet users in third-tier and lower cities. To put it simply, these are the “low-end cities” and “low-end users” that are not favored by brands.

But now, things have changed.

1. Portrait of 600 million “downstream users”

According to the QuestMobile report, the user scale of my country's sinking market exceeds 600 million. Moreover, whether it is the average usage time of mobile Internet per person or the user growth rate, sinking users are leading.

The number of sinking users not only surpasses that of non-sinking users, but also accounts for more than 50%!

Compared with non-downstream users, downstream users have closer connection with their mobile phones and have more free time to use their phones. For example, according to the report, low-tier users are more active from 6 a.m. to 12 p.m., that is, during waking hours.

Another thing to mention is that the income level of sinking users is significantly lower than that of non-sinking users. According to the report, 16.8% of low-end users have a spending power of more than 1,000 yuan, while spending below 200 yuan accounts for as high as 42.1%.

In other words, the online consumption capacity of low-end users is relatively weak!

However, the report also mentioned that although online consumption capacity is relatively weak, the terminal usage price of sinking users is not low, and the proportion of more than 3,000 yuan is as high as 30.5%.

This results in lower-tier users being more sensitive to prices, especially "price reduction promotions", "lottery prizes" and various small subsidies, which they never get tired of!

Re-examining the application scenarios of “downstream users”

According to QuestMobile’s report, the mobile Internet for low-tier users has the following typical characteristics:

1. There is more leisure time, a slower pace of life, and shorter commuting time. But at the same time, the city has few recreational facilities and not many places to go;
2. They are quite sensitive to prices and will usually only buy if the price online is lower. At the same time, the consumer psychology of "being greedy for bargains" is more obvious, that is, various discounts or various preferential activities;
3. High trust in offline, physical stores;
4. Acquaintances and friends have a greater influence on consumer decisions, including the "acquaintance" scams we often hear about, which are committed with ill-intentions.

What do these characteristics mean?

First of all, low-price business is not necessarily unreasonable

According to the report, the user growth of mobile shopping and mobile payment was the most obvious, at 6.7% and 8.6% respectively.

That is to say, there are still opportunities in the field of mobile e-commerce.

On the one hand, the user penetration rate in the sinking market is lower than that of the entire network, and the potential user scale is still expanding; on the other hand, as the consumption capacity and consumption concepts of users in the sinking market are changing, the average order value is also increasing.

As mentioned earlier, users in the sinking market have several major characteristics. In addition to having more free time, they are also sensitive to prices and their consumption decisions are greatly influenced by acquaintances. These features have been applied to social e-commerce platforms such as Pinduoduo, Taojiji, Yunji, and Beibei.com.

Even Taobao has achieved growth in users in the sinking market by relying on "Juhuasuan" and "Daily Specials", that is, low prices and the fission of acquaintances!

Secondly, short videos enter the stock market game

Compared with March 2018, the year-on-year growth rates of Douyin and Kuaishou reached 160.7% and 51.2%, respectively. Haokan Video and Weishi were even more terrifying, with growth rates reaching 559.9% and 1099.5%, respectively.

However, the average number of short video APPs opened by each user has increased to 3.4. In other words, as the number of overlapping users of Douyin and Kuaishou in the sinking market increases, users will inevitably face the choice of "choose one of the two".

Furthermore, the lower-tier markets also have a fertile ground for knowledge payment

According to the report, although the largest amount of time is spent on social networking, more and more time is spent on mobile video, news information, and mobile shopping, with growth rates of 21.6%, 8.5%, and 3.5%, respectively.

A considerable number of these users go to low-end markets to kill time and learn new skills. To put it simply, it means understanding the outside world through short videos and being afraid of being disconnected from the outside world.

Because of this anxiety, many users are willing to pay for "knowledge".

Browsers are still the main way to obtain information

According to the report, the main ways for users in the sinking market to obtain information are browser and search downloads, which are 30.82 million and 29.96 million respectively.

This is also the reason why, despite being criticized a lot, Baidu Browser is still willing to retain "Baijiahao"!

Finally, the market penetration of UnionPay QuickPass mainly relies on the sinking market

Many people may find it hard to believe that among the TOP10 financial payment apps, the total number of users of major bank apps plus Cloud QuickPass is roughly equivalent to that of Alipay.

In the sinking market, banks have established a good mass foundation for the promotion of online banking apps by relying on a large number of online stores and users' high trust in banks.

In contrast, WeChat payment is not very popular!

2. Business in the lower-tier markets: how JD.com attracts users

Although Jack Ma's Taobao and Alipay have proved a truth, that is, "He who wins the losers wins the world." However, it is only recently that the business in the sinking market has really been taken seriously.

Take JD.com’s group buying as an example.

On the "JD Group Shopping Day" on May 24, 26.2 million items were sold in just 24 hours, and orders exceeded 1 million within 15 minutes of going online. The total number of orders for the day increased 45 times year-on-year.

The reason is actually that they are targeting the characteristics of low-end users and carrying out "precise strikes"!

For example, JD.com launched the "Factory Direct Products" plan, which is based on more than 100,000 international high-quality manufacturing companies. Through customized marketing, technology, logistics and finance, it has built a "highway" directly to the sinking market, allowing users in the sinking market to enjoy "high-quality and low-priced" products;

For example, there are more than 60 kinds of social gameplay, which bring the fun of "group buying" to the bottom. The "one machine and two wings" social marketing system consisting of "group buying + social magic + group buying circle" makes the sinking users who are killing free time enjoy it.

According to data from JD.com, on the day of the group shopping event, social magic gathered first-tier brands, more than 10,000 companies distributed hundreds of millions of welfare prizes in total, and fission traffic accounted for more than 83%.

It is an excellent demonstration of "play + shopping"!

Finally, what I want to say is that whether it is JD.com Pinduoduo, or Douyin and Baidu, in essence, they all cater to the characteristics of sinking users, make them feel satisfied by catering to their preferences, and then realize the harvest of traffic.

The most feared thing is that brands are obsessed with the characteristics of non-downstream users and miss out on this wave of opportunities for downstream users.

Related reading:

1. New opportunities for the Internet in the second half of 2019!

2. 9 thoughts behind private domain traffic, fission, and sinking market

Author: Li Dongyang

Source: Chief Marketing Officer (ID:cmo1967)