2019 Pinduoduo APP product analysis report!

This article intends to analyze how Pinduoduo has opened up a new world in the current e-commerce market from the product operation level.

1. Product Overview

1. Product Name :

Pinduoduo

2. Product version :

iOS 4.50.0

3. Product positioning :

Social e-commerce leader

4. Product Introduction:

As a new e-commerce pioneer, Pinduoduo is committed to integrating entertainment and social elements into e-commerce operations. Through the "social + e-commerce" model, it allows more users to share benefits with fun and enjoy a new shared shopping experience.

5. Product slogan :

“Pinduoduo, Pinduoduo, the more you put in, the more you save…”

2. Product logic analysis

1. Product Features

Pinduoduo has pioneered an innovative e-commerce model of "social + e-commerce" in China, aiming to allow consumers who are more price-conscious to purchase goods at lower prices by using the group shopping model and sharing benefits through social platforms.

It is not difficult to see from its name that Pinduoduo focuses on group buying and affordable prices.

2. Product structure

The bottom of Pinduoduo is divided into five areas, namely home page, search, recommendation, chat, and personal center.

The product structure diagram is as follows:

Mindmanager 15th Edition

3. Product business logic flow chart

Group order flow chart

Pinduoduo’s unique group buying function supports both strangers and friends group buying.

The advantage of group buying with strangers is that the order can be completed quickly, but the product encourages a method whereby friends initiate the group buying payment and then share it on WeChat Moments. The purpose of the latter is to attract more traffic through social elements.

3. Demand Analysis and User Portrait

1. Demand Analysis

Basic requirements

You can choose your favorite products (brands) and participate in group buying. The products (many varieties) are much cheaper than other websites. The search button at the bottom and the ability to collect products can meet the basic needs of users for using products, which are all basic needs.

Expected demand

Product sharing, group buying, bargaining, the ability to return to the top with one click while scrolling down to view products, free shipping by default across the entire network, daily red envelopes, earning while shopping, Duoduo Orchard, etc. are all expected needs that meet the functions and product categories that users expect.

Excitement needs

The exciting point of Pinduoduo lies in the large discounts and unimaginably low prices, such as 1 yuan purchase for new customers, free items if you bargain, daily clearance, limited-time flash sales, and automatic group purchase information when choosing to group purchase. These features can better promote users to use the product and belong to exciting needs.

2. User portrait

User gender and age distribution:

Gender ratio of the population

Age ratio of the population

As can be seen from the figure, the majority of Pinduoduo's users are female, accounting for 66.59%, which is much higher than male users. This is related to the nature of the product. As men, shopping is very purposeful, while women are very casual, so this phenomenon is very normal.

In terms of age distribution, it is similar to regular online shopping products. Users of Pinduoduo are mainly concentrated between 20 and 35 years old, among which users aged 25 to 30 account for the largest proportion, reaching 29.26%. Users aged 31 to 35 and users under 24 also account for about 25%.

It can be seen that the main users of Pinduoduo are young users under the age of 35. Users in this age group may not have reached the ideal level of economic income, such as college graduates.

This type of users have a high ability to accept new things, are willing to try novel things, enjoy the joy of online shopping without losing touch with the times, and are the backbone of the Internet era.

User regions and proportions:

Use area ratio

From the above figure, we can see that users are mainly distributed in coastal areas and areas with convenient transportation. This is related to logistics capabilities and Internet access environment. In remote areas, logistics are inconvenient, Internet speed is slow, and the experience is not good, so it is difficult for users to pay.

Typical User Profile

1. Luo Xiuli, female, 35 years old, is a housewife in a third-tier city. She has a lot of free time and is responsible for purchasing daily necessities for the family, such as fruits, paper towels, laundry detergent, etc.

In addition, they have a high degree of group intimacy, have many relatives and friends around them, like socializing and gathering with relatives and friends, and use group buying to increase the topics of daily chat.

Moreover, in their daily offline lives, most of them have developed a habit of bargaining when shopping, so they are easily addicted to the online Pinduoduo group buying and bargaining shopping model.

2. Li Xiaoben, female, 21 years old, is a junior student in a coastal city. She has no source of income. Therefore, as a post-90s student, Li is more concerned about the cost-effectiveness of goods in online shopping, is very sensitive to the prices of goods, and has plenty of time.

I usually open the Pinduoduo app to see if there are any discounted products I like that are on sale. I like to invite classmates and girlfriends to join me in group buying and bargaining.

IV. Market Conditions

1. Transaction scale of China’s e-commerce market

According to the "Quarterly Monitoring Report on China's Online Retail B2C Market in the Fourth Quarter of 2018" released by Analysys, in the fourth quarter of 2018, the transaction volume of China's online retail B2C market was RMB 1,526.76 billion, a year-on-year increase of 28.4%.

The slowdown in growth means that the user base is almost saturated, but user habits are still being formed. Online shopping is still the first choice for users to purchase goods, but as users pursue an increasing quality of life experience, offline stores will also become more distinctive in order to complete the overall user experience online and offline.

2. Market share analysis

In terms of market share, in the first half of 2018, Tmall still ranked first in my country's B2C online retail market (including open platform and self-operated sales, excluding brand e-commerce), accounting for more than half of the market share, 55%, a year-on-year increase of 5%;

Following closely behind, JD.com accounted for 25.2% of the market share, an increase of 0.8% over the same period last year; Pinduoduo, as the "e-commerce dark horse", quickly seized 5.7% of the market share, ranking third, while Vipshop and Suning.com, which were established longer, only accounted for 4.3% and 4.5% respectively, which was less than Pinduoduo, which was established just three years ago.

Cao Lei, director of the E-Commerce Research Center, pointed out that most of the online shopping behaviors of PC users have shifted to mobile applications such as mobile phones and tablets.

Group buying and distribution are typical social e-commerce models, which have become a new way for e-commerce platforms to quickly attract customers and become the "third pole" that goes hand in hand with the retail e-commerce industry, platform e-commerce, and self-operated e-commerce.

3. Market data analysis

Fourth quarter financial statements

Pinduoduo (NASDAQ: PDD) released its 2018 fourth quarter and full-year financial report showing that in 2018, the platform's GMV reached 471.6 billion yuan, a year-on-year increase of 234%.

The platform's annual number of active buyers reached 418.5 million, a sharp increase of 173.7 million from the same period in 2017; in the fourth quarter, the average monthly active users of Pinduoduo APP reached 272.6 million, an increase of 42 million in a single quarter, a month-on-month growth rate of 18.2%.

In Q4 2018, Pinduoduo's revenue was 5.6539 billion yuan, a year-on-year increase of 379% from 1.1794 billion yuan in the same period of 2017, and a quarter-on-quarter increase of 68%; the annual revenue was 13.120 billion yuan, a year-on-year increase of 652%.

5. Product Function Analysis

1. Group order function

Mobile group order page

The most distinctive feature of Pinduoduo is the addition of the function of initiating a group purchase. As can be seen from the screenshot of the page, users have two options: purchase individually or initiate a group purchase. A group purchase can be initiated by oneself, and a link can be used to invite friends you know to purchase together.

You can also participate in group buying initiated by strangers. As long as someone places an order for each product, the message "X people are group buying, you can participate directly" will be displayed at the bottom of the page. The display area is between "Comments" and "Product Title". The limited-time digital scrolling can directly stimulate users to participate in the group buying.

Moreover, for most products, only two people are needed to successfully place an order, which greatly lowers the threshold for placing an order.

The group buying function is a core function to increase product sales and add new users. The prices of goods purchased in group will be reduced to a certain extent, so most users will choose to group buy.

However, if a user initiates a group purchase (most products are purchased by two people), and no other users participate in the group purchase within a certain period of time, the purchase will fail. However, this situation is generally rare.

2. Bargain and get it for free

Pinduoduo has placed the "bargain and get it for free" function in the most conspicuous menu bar. Users can invite friends to help them bargain by sharing it with WeChat or QQ friends.

As long as users can invite enough people to help them bargain, they will have the opportunity to get their favorite products for free. This has become Pinduoduo's main way to achieve exponential growth in users.

Pinduoduo's cost of acquiring a single customer in the past four quarters was 3 yuan, 7 yuan, 9 yuan and 24 yuan respectively, while the cost of maintaining a single active user for Taobao and JD.com in 2018 was more than 50 yuan. Such a low customer acquisition cost has become the key to Pinduoduo's success.

Moreover, the traffic dividend generated in the process of users sharing bargaining links is even more difficult to estimate. Pinduoduo has made full use of the huge social traffic dividend gathered by WeChat and other platforms to open up a new world in today's e-commerce red ocean.

3. Diversified promotional activities

Menu bar interface

Pinduoduo’s promotional activities can be described as dazzling, basically covering the promotional activities of most e-commerce products.

There are many discount items on the homepage menu, such as limited-time flash sales, stock clearance, Duoduo Orchard, 9.9 special sales, etc. The rules of different discount activities are slightly different, including:

Limited-time flash sales: Within a specified (relatively short) period of time, products that can be flash sold are released, and you need to initiate or participate in a group order to enjoy the discount.

Clearance sale: During a specified period of time (longer), today’s clearance items are displayed. The categories are richer than those of flash sales, and you need to initiate or participate in a group order to enjoy the discount.

Brand Pavilion: Various big brands are settled here, the quality is guaranteed, and there are super low discounts and large coupons.

9.9 Special Sale: New products are added at 10 am and 8 pm every day. There are rich categories and the prices are almost all below 9.9. You need to initiate or participate in a group order to enjoy the discount.

Help to enjoy free orders: select a product, invite WeChat or QQ friends to help, and you can get the product for free when the specified number of people reaches it. However, the friends who help must be new users of Pinduoduo who have never used Pinduoduo.

Receive cash every day: You can receive a cash red envelope every day, but you need to share it with WeChat friends within the specified time before you can open the red envelope.

1 cent to win a prize: Spend 1 cent to participate in the prize draw for the displayed products. (However, the winning odds or number of winners for each item are not specified).

BangBang Free Group: Within the specified time, invite a specified number of friends to pay for the product at a lower price, and you can get the product for free, but refunds are not supported after the group is formed.

4. Other functions

Pinduoduo has abandoned the shopping cart function of traditional e-commerce categories, added a chat function, and added a sharing function to the personal center page. The ubiquitous social elements fully reflect the "social + e-commerce" operating model.

Pinduoduo will recommend relevant product content to users based on their preferences and browsing history. For example, if the user searches for "sports shoes" at the beginning, related products such as "socks" and "insoles" will appear on the "recommendation" page.

There are also many entry points for recommendations, such as the recommendation page (main), chat interface, and below the personal center page.

Based on the user's browsing history, it can infer what the user wants to buy now, and accurately use big data matching to help users filter products, saving users' selection time.

The user interface can be customized for each individual, which is a common phenomenon on e-commerce platforms.

6. Competitive product analysis

The following conclusions can be drawn from the above table: the three have very different main styles of products. Pinduoduo and Taobao focus on low-price discounts of products, with the former having lower prices, while JD focuses on authentic guarantees and extremely fast delivery.

From the perspective of user characteristics, Pinduoduo (mainly home furnishing, maternal and child care, and women's clothing) is more inclined to female users, while Taobao Mall and JD.com (mostly digital products) are comprehensive e-commerce products, so there is not much difference in the ratio of men to women (the user group is fixed, and each takes what it needs);

Taobao has the highest monthly active users. Pinduoduo's monthly active users have surpassed JD.com, and the social e-commerce model has contributed greatly to this.

As for the coverage of ASO keywords, Pinduoduo has great potential, which is inseparable from the promotional activities such as "cash check-in" on the product homepage. The platform achieves new product acquisition and activation through sharing and recommendation among users and mutually beneficial relationships.

In general, Pinduoduo has obvious advantages among similar competitors. Its user base is growing rapidly, and users can get affordable goods through the platform. However, as the user base increases, the number of users pursuing quality of life is also slowly increasing, and the issue of user retention cannot be ignored.

Interactive page comparison

Taobao and JD shopping pages

A comparison shows that the homepages of Taobao and JD.com are almost the same, with the search box at the top and the bottom divided into five areas: Tmall’s are “Taobao,” “Weitao,” “Messages,” “Shopping Cart,” and “My Taobao.”

JD.com’s are “Home”, “Category”, “Discover”, “Shopping Cart” and “Mine”.

Pinduoduo directly cancelled the search box at the top, leaving more area to display product information, and replaced the common shopping cart function with the chat function in the navigation menu at the bottom.

The search function is placed at the bottom. This change can greatly shorten the user's decision-making time when purchasing goods and promote the success of transactions. It can be seen that Pinduoduo has indeed played a pioneering role in the field of e-commerce platforms.

Payment page

Payment method page

A comparison shows that after submitting an order, the payment time among the three is quite different. JD pays users within 24 hours, while Taobao pays users within 72 hours.

However, Pinduoduo's payment time is not clear enough. The main reason for this situation is that most of Pinduoduo's products are group-buyers and flash sales, and the payment time for different products is different. JD.com, on the other hand, is a self-operated + merchant with its own warehouses and a small amount of inventory.

Taobao adopts a B2C model, where merchants ship goods and there is sufficient supply, allowing users more time to choose whether to pay.

When it comes to choosing payment methods, Pinduoduo recommends WeChat Pay (mutual benefit and win-win), while Taobao only supports Alipay payment. JD.com mainly promotes its own Baitiao payment and does not support Alipay payment, which indirectly reflects the fierce competition in the current mobile payment market.

VII. Conclusion

In general, Pinduoduo's advantage lies in its product positioning of the "social + e-commerce" online shopping model. The pioneering "bargain and get it for free" gameplay is a key step for the platform to reduce customer acquisition costs, which is summarized as follows:

1. The product has a clear logical structure and rich product information. Compared with products on e-commerce platforms such as Taobao and JD.com, it is a lightweight product with fewer usage processes and simple operation. It is more in line with the user role positioning and meets the user's needs for "fun and affordable".

2. From the perspective of market size, most of the online shopping behaviors of users on PC have shifted to mobile applications such as mobile phones and tablets. Group buying and distribution are typical social e-commerce models, and have become a new way for e-commerce platforms to quickly attract customers.

The demographic dividend has disappeared, but the domestic sinking market still has great potential, and the characteristics of the mainstream user groups perfectly match the WeChat entertainment traffic. Pinduoduo has great room for appreciation in the sinking market.

3. The products mainly include clothing, home furnishings and daily necessities. The majority of users are female, accounting for more than 60%, with a market share of 5.7%. It is currently the third largest e-commerce platform in China.

4. In terms of product functions, the area display of the group buying function is good, which can provide users with real-time information very well. However, it is recommended to increase the number of reminders required to cancel the order, reduce user waiting time, and improve the success rate of commodity transactions.

While JD.com and Taobao are beginning to build community and live-streaming marketing models, they are also following user demand to establish group-buying communities centered around various categories, making it easier for users to quickly participate in group buying and increasing user stickiness.

In terms of product payment methods, it is recommended to add the "payment on behalf of" method of Boyfriend Pay to meet the needs of female users and attract new users.

Author:2717

Source: 2717