The membership models of the 9 major e-commerce platforms are fully revealed

As it becomes increasingly difficult to acquire customers online, in order to drive sustained growth, it is necessary to make arrangements in all aspects of attracting new customers and retaining and converting existing customers. Among them, the membership system is one of the effective ways to retain users.

After this year’s 618, I summarized a major keyword of Taobao’s 618 this year - “membership”. You will find that this time almost all merchants’ consumption “baits” are bundled with brand memberships, and they use all tricks to lure you into joining.

In fact, it is not only the merchants who are promoting memberships. “Platform memberships” have also been booming in recent years. Like Taobao 88VIP, JD PLUS membership, Suning.com Super membership, Pinduoduo money-saving monthly card, etc., major platforms are stepping up the layout and upgrading of paid membership business, setting off a tug-of-war among consumers.

1. Review of paid membership models of major platforms

As early as 2005, Amazon launched the Prime membership program, and now the number of members has exceeded 100 million. In contrast, in China, JD.com launched the PLUS membership in 2015; in 2016, Vipshop launched the Super VIP; in 2017, the membership model began to explode, with NetEase Kaola, Suning.com, NetEase Yanxuan and others entering the market; it was not until August 2018 that Alibaba launched the 88VIP membership.

1. Timeline

• In October 2015, JD.com launched the PLUS membership service;
• At the end of 2016, NetEase Yanxuan launched membership services;
• In June 2017, Xiaohongshu launched Black Card membership. In August 2017, Vipshop launched Super VIP.
• In November 2017, Kaola launched the Black Card Membership;
• In December 2017, Suning.com launched SUPER membership;
• In April 2018, NetEase Yanxuan launched the "Super Member" program;
• In July 2018, Xiaohongshu Black Card was upgraded to Xiaohong Card;
• In August 2018, Taobao launched 88VIP. In August 2019, Pinduoduo launched a money-saving monthly card.
• In March 2020, NetEase Yanxuan upgraded its Pro membership and launched the "Enjoy first, pay later" and "Refund the price difference if the principal is not returned" services;
• In August 2020, Taobao 88VIP was upgraded to cover 9 major life scenarios.

You see, almost all the platforms we are familiar with have launched their own paid membership programs. Especially in recent years, we have been constantly taking action to upgrade our membership products frequently, with significant optimization and adjustments made in terms of rights types, content, prices, etc.

Here, I have reviewed the membership product information of the current mainstream platforms and summarized them below:

2. Trends and characteristics of platform membership models

Behind the various membership products of these platforms, we can see the following four trends and characteristics.

1. Three benefits: saving money + service + co-branding

The membership benefits design of all platforms is almost always centered around the three pillars of “saving money + service + collaboration”. Among them, the core benefit is saving money, the basic benefit is service, and the value-added benefit is co-branding.

1) Save money

We can see that "saving money" is the top priority among all types of benefits. From card opening red envelopes, coupons, membership prices, exclusive brand discounts, etc., all are "real money" benefits. This also indirectly reflects that no matter how many membership benefits there are, "saving money" is the interest that consumers care about most. Therefore, most platforms will directly help you calculate the bill and tell you in advance the total amount you can expect to save after joining, which is very intuitive.

2) Services

User service is actually the most important aspect that reflects the value of membership and is also one of the greatest charms of the membership system. However, the service rights and interests currently provided by these platforms are still relatively basic, and only "exclusive customer service" has barely become standard. But even at this point, there are differences in the depth of service on different platforms. Some are online 24 hours a day, some do not require queuing, and some provide services at fixed times and require advance reservations. Companies like Pinduoduo and Amazon don’t have any settings at all.

3) Joint

This is a popular way of playing on major platforms and an important factor that consumers are willing to pay for.

From the user's perspective, this is an economic account. If the rights and interests include joint membership, then there is actually money saved. From the merchant's perspective, this is not only an effective diversion of traffic between brands and a mutual benefit, but also, through the linkage of different merchants, it opens up multiple online and offline consumption scenarios for users and establishes a full-scenario advantage with a closer relationship with users.

2. Bundle the "growth" model to encourage more consumption

An excellent membership model is never just one. Membership models usually include free membership, paid membership, stored-value membership, and a growth membership. Merchants will package and combine several models in order to achieve the best results.

In the design of paid membership on these platforms, many of them are bundled with a "growth" model, which is simply a "consumption points system." The more you spend, the more points you earn, and the more benefits you enjoy. The platform encourages consumers to buy, buy, and buy as much as possible through this positive incentive "step-up" method.

For example, when joining Taobao, you need to have a Taobao value greater than 1,000, and you can purchase it for 88 yuan. If it is less than 1,000, it will cost 888 yuan, which is a difference of 10 times! It’s similar with JD.com. If your JD value is greater than 4,500, you can use 99 yuan to purchase a PLUS membership that originally costs 199 yuan.

For example, NetEase Yanxuan’s double points and exclusive redemption, and Suning.com’s 10~20 times diamond rebate are all aimed at guiding consumers to buy more and earn more points. For the same consumption, member users can enjoy more points than ordinary users, so they have more motivation to consume.

3. Benefit distribution is intentional and encourages regular consumption

The platform not only hopes that you buy more, but also hopes that you buy frequently. Because only by ensuring a certain consumption frequency can users establish consumption habits, create stronger stickiness, and thus develop trust and goodwill towards the platform brand.

Therefore, the platform is also full of "intentions" in the distribution of membership benefits.

One aspect is frequency control. Platforms like JD.com, NetEase Yanxuan, Xiaohongshu, and Kaola.com all issue a certain amount of coupons on a monthly basis, and also offer free trial products, membership day events, shipping fee reductions, etc. "Monthly" has become a very important cycle, ensuring that users have sufficient and reasonable consumption frequency.

The other side is to break the whole into parts. Everyone should have realized this long ago. Don’t be fooled by the fact that these benefits packages contain coupons and red envelopes worth hundreds of yuan. In fact, this is just the total amount, and what you actually get is just “change”. For example, Suning.com’s 140 yuan coupon is actually 7 20 yuan coupons; JD.com’s monthly 100 yuan coupon is also composed of small denominations of 5 yuan and 10 yuan, and many of them have discount conditions. If you really want to make full use of these coupons, you have to buy more, buy more frequently, and use them again and again. This is also a common "routine".

4. If the savings are not enough, the price difference can be refunded to provide a safety net for users

When I was analyzing Baiguoyuan's membership model before, I found that it launched the policy of "refund of price difference if savings are not enough" very early on, which was a big highlight. Nowadays, this model has also begun to appear among platform members, becoming a new trend.

We have seen that both NetEase Yanxuan and Suning.com have launched a policy of "refund of price difference if no return of principal is made". If the amount of money saved by an annual member during the membership period is less than the card fee, the price difference will be returned to the user's account in the form of a gift card or a no-threshold coupon. Although it cannot be withdrawn as cash, it can still be used within the platform, which is beneficial to both the platform and consumers.

This "refund of price difference" model is very attractive. It firmly grasps the pain point of "saving money" for consumers, provides a safety net for consumers, and provides the greatest degree of protection, so that users can buy boldly and willfully without worrying about calculations. At the same time, this approach has effectively narrowed the distance between consumers and the platform, lowered the threshold for building trust, and laid a good psychological foundation for the platform's subsequent membership operations.

Conclusion

In the past 10 years, as the natural growth of Internet users has dried up, major platforms have begun to adjust their user strategies, paying more attention to in-depth user management and starting to work hard. "Membership" is one of the effective weapons for user management.

In this process, consumers' demands, consumption capacity and willingness are changing. While people pay attention to cost-effectiveness and saving money, they also increasingly value quality and service experience. It is in this context that major platforms have upgraded their membership products, hoping to retain and screen users, and tap into consumption potential by “saving more money” and “enjoying better services”. In the increasingly fierce competition, they also want to push wavering users between platforms to quickly move towards their own side.

All this has just begun, and I believe that the "membership war" between major platforms will intensify. Whoever wins the users wins the future. We hope that businesses can truly improve the service level for users in this process and allow consumers to benefit tangibly.

Author: Yan Tao Sanshou

Source: Yan Tao Sanshou