Which aspect of Pinduoduo is most similar to Toutiao?

Known as the Toutiao of the e-commerce industry , Pinduoduo’s traffic strategy is indeed perfect. However, after the melee really started, we found that Pinduoduo's creation of a "consumer cocoon" to attract traffic and user stickiness is the most similar point between it and Toutiao (Toutiao corresponds to the "information cocoon"), while NetEase Kaola, which uses "My Beautiful World" as its slogan and plays the "taste" card, has an e-commerce strategy that is completely opposite to each other.

Jack Ma once said that he sometimes couldn't sleep at night because he was worried that something would suddenly pop up and overthrow Alibaba . Although it cannot be called a "disruption" yet, the emergence of Pinduoduo in the past few months has indeed made Alibaba nervous. It also gave Tencent, which was struggling to find a way to counter Alibaba, an opportunity.

In its rapid and sudden attack, Pinduoduo began to disturb the long-standing balance in e-commerce. Many people were surprised that the "natural" pattern of Alibaba as the big brother and JD.com as the second might be shaken, and the shaker was Pinduoduo, which is growing at an explosive speed like today's headlines.

Known as the Toutiao of the e-commerce industry, Pinduoduo’s traffic strategy is indeed perfect. However, after the melee really started, we found that Pinduoduo's creation of a "consumer cocoon" to attract traffic and user stickiness is the most similar point between it and Toutiao (Toutiao corresponds to the "information cocoon"), while NetEase Kaola, which uses "My Beautiful World" as its slogan and plays the "taste" card, has an e-commerce strategy that is completely opposite to each other.

1. Pinduoduo is going down, NetEase Kaola is going up, e-commerce has gone from "Three Kingdoms" to "Three Tiers"

On June 3, at a forum, Pinduoduo Vice President Li Yuan declared that Pinduoduo's daily order volume was second only to Taobao , and the total daily package volume accounted for 20% of the country.

Although Pinduoduo's average order value is shockingly low and the "gold content" of each package is not very high, its 1/5 share of e-commerce orders is undoubtedly a huge threat. This brand , which was founded in 2015 and has been on the fringe of e-commerce for a long time, is beginning to enter the mainstream.

Huang Zheng once strongly denied Pinduoduo’s “low-class” image, claiming that there would always be people who needed his products. However, it is undeniable that Pinduoduo’s image of low quality and low prices is inevitable. The numerous complaints from the public also reflect that Pinduoduo cannot escape the definition of low-end e-commerce.

While Pinduoduo is still heating up, NetEase Kaola, which originally focused on cross-border e-commerce , could no longer sit still and announced on June 6 that it would be renamed "NetEase Kaola".

Removing "Overseas Shopping" means officially announcing the entry into the comprehensive e-commerce market and starting a head-on competition with Alibaba, JD.com and others.

NetEase Kaola’s image (or self-emphasized image) is completely opposite to Pinduoduo’s. NetEase products are accustomed to portraying themselves as the "most impressive" in the industry, including games , music, education, and e-commerce. NetEase Kaola, which started out as a cross-border e-commerce company and has been at the top of the cross-border market segment for a long time, has already completed the transformation from an image of "authentic", "good goods", and "low price" to one of "quality" and "taste".

It is worth noting that getting rid of overseas shopping and moving towards comprehensive e-commerce does not mean going away from cross-border operations. It seems that NetEase Kaola is just expanding its business scope, because from the perspective of so-called "taste", NetEase Kaola's advantage in the past, cross-border goods, are more in line with Chinese consumers' yearning for a stylish life. Today, NetEase Kaola obviously wants to inherit the taste, expand its product range, and use the past popularity to do bigger business.

Two completely different invasion methods are jointly stirring up the e-commerce situation. Since Alibaba and JD.com have joined forces, the "habitual stability" of the e-commerce landscape has been broken. Not only are shared bicycles , online car-hailing , and food delivery industries bustling, but the e-commerce controlled by giants is also not a monolithic entity.

Pinduoduo, which goes against the consumption upgrade, NetEase Kaola, which emphasizes that it is leading the consumption upgrade, and JD.com and Alibaba, which are conventional platforms, e-commerce has actually evolved from the three-kingdoms competition in the past to the coexistence of three "levels".

It must be pointed out that "archiving" according to the level of "prestige" does not contradict the ranking according to size. It is just a new expression of the evolution of e-commerce status and does not represent the difference in its development level. When everyone is talking about consumption upgrades and the new retail industry in full swing, the disruption caused by NetEase Kaola and Pinduoduo reflects the debate over the development of e-commerce at the current time point: whether to continue to be cheap (Pinduoduo going down), or to improve the quality (NetEase Kaola going up).

2. Pinduoduo made its fortune by relying on the "consumption cocoon", but traffic is not everything

What Pinduoduo is most criticized for by "critics" is its viral traffic model. I asked someone to help me bargain. At first I could bargain a lot, but later it became less and less and it was almost impossible to bargain anymore. It was such a blatant trick that made me sigh. Things like being able to see avatars when bargaining is a moral blackmail against new users, and not being able to get red envelopes for inviting registrations after a lot of effort, etc., clearly show that they are trying to attract large numbers of people at a low cost, which is the "true essence" of Xin Shi Xiang .

Intuitively, this is very similar to Toutiao. The various traffic diversion and installation routines used when Toutiao was rising are still vivid in our memory. But this is probably not the whole truth about Pinduoduo's traffic.

It is rumored online that Zhang Yiming, the CEO of Toutiao, publicly said at a party that his goal was to make money from "people who cannot delay gratification." Although this is morally objectionable to many people, his business model is successful. In addition to attracting traffic , Toutiao's "nipple-pleasant" content has become a killer for retaining users - they can keep scrolling for hours.

By analogy, Pinduoduo's routine is very similar. It's not just about traffic. Its various eye-catching " titles " make users fall into shopping traps step by step (its advertisements are even suspected of fraud), attracting continuous shopping and stimulating certain inappropriate demands.

"Shopping addiction" has become the norm for some Pinduoduo users, a state very similar to being unable to stop scrolling through Toutiao. A Zhihu netizen named “Chunjie’erbei” even lamented, “Please, Pinduoduo, spare our ordinary family” because his father was addicted to buying low-priced and low-quality goods from Pinduoduo.

Therefore, traffic is not everything for Pinduoduo. What makes it more like Toutiao is the "induced enhancement of user stickiness." Toutiao takes advantage of the fact that people cannot delay gratification, and Pinduoduo takes advantage of the constant suggestion of low prices and great value. Both are in the dopamine business.

Furthermore, this induced suggestion has formed a "consumption cocoon" similar to the "information cocoon": Pinduoduo actively prompts and satisfies the so-called low-price demand, stimulates the market with constant bargaining, and guides consumers to think that they may just like low prices. The daily shopping environment is surrounded by low prices, and users who have more choices are bound to this consumption level and cannot be freed.

It’s like Toutiao constantly uses information flow content based on “ user behavior preferences” to satisfy users. Over time, users are bound by the “information cocoon” and their information vision becomes increasingly narrow.

In the case of the Zhihu netizen's father, all his purchases of fruit fans, clothes, shoes and air conditioners were "Pinduoduo-ized", including endless problems such as damaged fan bases. However, his economic conditions were not too bad, so this was obviously not the state his consumption should be in.

Moreover, the rampant clickbait, copycat, and vulgar content on Toutiao's platform is, to some extent, the result of the symbiosis between the platform and the content. The platform also relies on this "content drug" to some extent, and the user stickiness it brings is too tempting. The same is true for Pinduoduo. The platform has reached a certain balance with those low-quality or low-price merchants. The merchants provide low-price gimmicks to constantly induce users in the "consumer cocoon" to shop, and the platform relies on them to obtain traffic and stickiness.

3. NetEase Kaola’s “taste” is the logic of a “seller’s market” in a buyer’s market

E-commerce is definitely a buyer's market, and NetEase Kaola's entry into comprehensive e-commerce and emphasis on "taste" is, in the final analysis, nothing more than using the "seller's market" logic to enter the home-buying market, taking a path opposite to Pinduoduo.

As we all know, the root cause of Toutiao's "information cocoon" is the "creative cocoon" created by the algorithm: only those contents that continuously meet the user's nipple-like needs can obtain high recommendation weights. Under the baton of the algorithm, creators only do things that are beneficial to themselves, resulting in all kinds of non-nutritious content that obtains platform subsidies, and the content created is limited to a narrow range.

The same is true for Pinduoduo. Merchants who have joined Pinduoduo are offering group purchases at low prices. Many Pinduoduo users have reported that the same items sold on Pinduoduo are also available on Taobao, but they are of a lower price and lower quality in the entire Taobao system. Although this cannot be said to be true for all merchants, it is obvious that the same merchant has different attitudes towards the platform.

The essence of the "consumption cocoon" is the "supply cocoon". The narrow-mindedness of the supply side makes users "think that this is their own demand", which in turn strengthens the product supply choices on the merchant side, thus forming a kind of not very benign cycle.

In this sense, NetEase Kaola's adherence to NetEase's consistent "taste" is more like an act of actively breaking out of the "supply cocoon". In the context of consumption upgrading, consumers themselves have an inherent demand for products of better quality and taste, but this demand needs to be guided out. "They" do not know that they have such a demand and that there are such products that can meet this demand.

The slogan "My Beautiful World" is more like actively telling consumers that this is the consumption pattern you want. After your income increases and your social status improves, this is the taste and style you should want.

Using mobile phones as an analogy, in 2007, although the copycat phones in Shenzhen were of poor quality, they were cheap and had various functions, which made many people like and buy them. But then the era of smart phones arrived, led by the release of the iPhone Hone 4 by Steve Jobs . Only then did people realize that the cheap and flashy copycat phones were not what they were looking for in a mobile phone, but were just market misleading.

In March, when Baidu Information Flow tried to integrate information about the "Two Sessions" and actively output high-quality content on the content supply side (rather than based on user choices or guessing users' inappropriate preferences), the user feedback received was very good.

Many times, the same is true for consumers. Although it is a buyer's market, they need to use the thinking of a seller's market and think about the way e-commerce should be done from the supply side of goods, guiding the formation of the necessary demands under the tide of the times, rather than satisfying consumers' incomplete demands (for example, it is true that everyone likes to get a bargain, but it is one-sided) and constantly strengthening them.

According to Pinduoduo's logic, the same pair of pants are cheap, of average or poor quality. However, with repeated inducement bombardment, consumers may buy pants and then buy clothes and shoes, and finally seem to have returned to the era of shopping in hypermarkets more than 10 years ago.

On the contrary, NetEase Kaola emphasizes that consumers should buy "tasteful" pants, and works with suppliers to provide a pair of pants that claim to be "tasteful", guiding rather than following and exploiting, and using the seller's market mindset to test the way e-commerce should be done.

From a purely business model perspective, it is difficult to say which one is right or wrong between Pinduoduo and NetEase Kaola, two completely different ways of thinking. Pinduoduo has achieved explosive growth, and NetEase Kaola has been at the top of the cross-border e-commerce field for a long time.

Internet product managers despise Zhang Yiming from the bottom of their hearts, but at the same time they worship his products such as Toutiao, Volcano Video , and Douyin as if they were gods, and think about how they have so many users, just like reading the Bible.

4. Stepping out of the “consumer cocoon”, the end of e-commerce is not just about users

Debts must be repaid eventually. The once prosperous Toutiao is now starting to repay its debts slowly. Its approach is to start from the content end and to assume "social responsibility" (in the words of Zhang Yiming). Various rectifications are being "implemented". Some self-media teaching (薅羊毛) groups that focus on Toutiao have begun to become deserted, and high-quality content on the platform has received more and more substantial attention.

Applying this to Pinduoduo, after its rapid growth, Pinduoduo may also have to repay its debts one day. Its approach is similar to that of Toutiao, starting from the commodity end. For example, amid a chorus of negative comments, Pinduoduo has recently started the so-called poverty alleviation effort, aiming to help farmers in old revolutionary areas sell high-quality agricultural products.

Whether it is sincere or not is not the point for now, but it at least shows that the salvation of the "information cocoon" must return to the final content production, and the "consumption cocoon" must return to the final commodity supply.

What Pinduoduo originally harmed was the real economy behind the goods. Generally speaking, industrial upgrading means improving product quality and changing market position. Pinduoduo's approach runs counter to this. If hundreds of millions of people become Pinduoduo's fans and continue to concentrate on consuming lower-level products in the manufacturing industry in a "consumer cocoon", it will eventually either lead manufacturers to go against industrial upgrading or make quality manufacturers unable to survive.

The so-called wave of consumption upgrading ultimately requires the power of the real economy to be realized. This irreversible trend is, to some extent, also people's yearning for a better life in the new era.

Pinduoduo and NetEase Kaola have entered the competition of comprehensive e-commerce from completely opposite directions. In the short term, Pinduoduo's explosive energy is still there, and NetEase Kaola may not achieve the same achievements as Pinduoduo in the short term by expanding its overseas shopping. But in the long run, based on the logic of the seller's market, NetEase Kaola, which is closer to the physical manufacturing end, may have more opportunities.

Of course, what is ignored here are the e-commerce giants Alibaba and JD.com, which neither used improper demand to create a "consumer cocoon" nor used the "seller's market" logic to actively guide demand. However, they were the original bosses in this territory. How they deal with the challenges of Pinduoduo and NetEase Kaola is another story.

The author of this article @曾响铃 is compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

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