Analysis of group buying gameplay: Why is Pinduoduo so popular?

In 2017, after Pinduoduo launched a large number of offline advertisements , it quickly became popular like a dark horse . Then various technology media and senior e-commerce self-media people published various articles about the large-scale viral spread of Pinduoduo's group buying model, most of which were relatively macro-level analyses. For example: business model , consumer market, user groups, consumer soil, etc. I believe that everyone who has paid attention to this has also gained some macro-level understanding.

Many people are not optimistic and think it will not last long. However, when new things come, it is useless to be dissatisfied and criticize them. Existence is reasonable.

This cannot be simply and roughly summarized as consumption downgrade and social dividends. I have a persistent point of view: to generalize everything and draw conclusions is rogue. Analyzing the leverage points behind this model, getting closer to the essence of product services, and then turning it into our own capabilities is what we should do on the road to career development, upgrading and fighting monsters.

What is the key behind turning a tactical gameplay into a product's macro-core strategy?

This article analyzes the meaning behind it from the concrete levels such as specific user scenarios and business implementation, attempting to have a deeper understanding of the essence of Pinduoduo's group buying model.

Platform gameplay

After repeated experience, I divide the gameplay of Pinduoduo platform into four categories:

1. Go directly to the group;
2. Invite to participate in group buying;
3. Invite help: bargain for free, group leader for free, help to enjoy free bill;
4. Sharing and reciprocity: cash sign-in, share and receive red envelopes.

Among them, sharing is the core of the group buying model and the soul interaction of social e-commerce. It determines many key indicators of the platform. The success of sharing directly affects the effect of viral transmission . Advertising value: increasing user brand awareness and functional experience through repeated exposure; traffic conversion value: registration or order conversion, and conversion of being guided to use the same function or purchase goods.

It is obvious that inviting people to participate in group buying can directly lead to order conversion and can directly play a role in attracting new customers and promoting activation. The third and fourth methods can mainly reflect the advertising value and attract new customers.

Bargain and get it for free: a typical sharing support model. After you purchase the product and share it, your friends can help you bargain down to 0 yuan and finally get the product for free by clicking the bargaining button in H5 or APP (there will be more bargaining in APP). This is most common in our Moments and group chats. It can help with advertising exposure and viral spread, and ultimately lead to certain new conversions.

The group leader can get it for free: This is a lottery group model. After initiating a 0 yuan group order, and inviting friends to join the group until the number of people who have joined the group is successful, the group leader and a random member can get the goods. It can be regarded as an optimized form of the early " one yuan purchase ". The social threshold of this model is relatively low, because friends also have a certain probability of obtaining the goods. In addition, the lottery group itself is quite interesting, and can play a good leverage role in attracting new customers and increasing user activity.

Help and enjoy free orders: a typical friend-helping model. After placing an order for free, share the QR code with friends. Your help is successful. When your friends download the APP through the QR code and log in to WeChat , you can enjoy free orders. This model has a high threshold for friend operations and is mainly targeted at sharing with individuals. It has a high social threshold, but it can bring certainty in APP new user conversions.

Sign in with cash and share to receive red envelopes: It is essentially a sharing and rewarding model, and the steps include signing in, receiving cash sharing, sharing with the sign-in group, and withdrawing cash when the amount reaches a certain limit. In this gameplay, cash or red envelopes are both good incentives, and it incorporates two sharing methods. One does not require the participation of friends, and you can get red envelopes by signing in and sharing every day, which plays a role in promoting activation and retention ; the other requires friends to join the group, which is the same friend assistance mode mentioned above.

In general, this gameplay path is too long, and the users it naturally targets are the lowest-level users who are subject to price discrimination and have a lot of free time in exchange for small discounts with low certainty. (To be honest, I can’t help but complain about this design…)

people

The composition of Pinduoduo's users seems to no longer be able to be explained by the conventional classification of e-commerce, for example: third-, fourth-, fifth- and sixth-tier cities, users outside the Fifth Ring Road, etc., and in order to fit user paths and scenarios.

Here we make a distinction based on the user interaction behaviors of sharing, being shared, and not sharing. Through my observations and repeated experiences with some users, this distinction is more practical.

Sharing is the core of the group-buying model and the soul interaction of social e-commerce, and it determines many key indicators of the platform.

1. Shared users:

Sharing users are naturally old users of the platform, who are good at and willing to take advantage of various preferential methods. As the initiators of group buying, they generally have clear shopping needs and can get corresponding discounts by inviting friends to help. This type of user pays more attention to gameplay and secondly to the products, so they will make impulse purchases and are willing to use social currency in exchange for discounts.

2. Do not share users:

Users who do not share are naturally isolated from the share-with-friends assistance module, and ignore various sharing and free-for-all behaviors on the platform. They generally participate in group buying directly, and focus mainly on cost-effective and targeted products on the platform. They are relatively rational consumer users. Moreover, the value of their own social currency is relatively high, and they regard shopping as a relatively private matter. Social sharing is completely ineffective for this type of users, unless they are shopping for targeted products with great discounts.

3. Shared users:

The shared users are passively triggered. If they are new users, they may be converted into new users after repeated triggering. If they are old users, they have a certain understanding of the gameplay and may retain and increase activity.

If the sharing is an invitation to join a group, then it mainly depends on whether the product itself is a rigid demand and a target product; if it is helped by friends, then the consumer psychology based on sensitivity to discounts and bias towards cost-effectiveness will form a certain degree of activity. The overall opportunity of social sharing, with the trust and endorsement of friends, can bring better conversions.

Regarding the "sharing" here, there is an interesting point that reflects the logic of group buying: in the merchant backend communication area, many merchants complained that many new users were not familiar with the operation and chose to initiate group buying, but the orders were cancelled due to timeout, which made them anxious. This really surprised me, because, excluding the two rare cases where the product is not popular and there is no way to join the group directly, and the user loves socializing and likes to share with friends to buy together, most users should choose to "join the group" without waiting.

From the platform's perspective, the ideal situation is definitely to be able to invite friends to initiate group purchases, attract new members or increase new orders. Those who are unwilling to share on social media and wait passively just happen to be able to join the group directly and succeed. Of course, in reality, it is definitely related to the popularity of the product, the purchasing habits of users, and the amount of traffic to the product recommendation position.

This is also where the logic of group buying becomes more interesting: it can both attract new customers and quickly form groups. How to reasonably control various factors to maximize overall sales is a point worth exploring in order to enhance user value . (My personal thinking is limited, and I look forward to a more in-depth and global analysis here...)

Platform-specific features

1. Social currency exchange discount

The above has analyzed various ways of playing group buying, and the main function of the carrier is sharing. Pinduoduo developed rapidly in the early days and promoted user sharing as much as possible. Now, with the gradual sedimentation and stratification of the 300 million user base, not sharing has become a major shopping method on the platform.

If the early sharing was for the purpose of inviting people to join a group, in a model of mutual benefit among friends; now sharing free meals is a way to consume social currency, then the target users are naturally low-value social currency users.

Therefore, as the target of new users gradually becomes saturated, this long-link and social-dependent gameplay will cause users to become numb, and the unrestrained sharing function will become a problem in the circle of friends, causing people to be disgusted.

Therefore, my idea is: shortening the gameplay path in the later stage, increasing the benefits of friends, and finding a new balance point between the interests of new users on the platform and the benefits to users and friends will be an important demand. In addition, it is also an important idea to differentiate and refine product selection based on the characteristics of this group. After all, high-frequency and urgently needed consumables, coupled with discounts, can still give consumers a primitive stimulation.

2. Lower the decision threshold

• Free shipping for the entire site;
• There is no shopping cart;
• Affordable price;
• The gameplay is relatively simple;
• Social endorsement from friends;
• Herd mentality.

The factors listed above are all factors that help users reduce the cost of shopping decisions. Since they are relatively intuitive, they will not be expanded. Then a lower decision-making threshold will be good news for people with indecisiveness and those who are addicted to shopping. It will naturally lead to more impulsive and irrational consumption. However, it seems that this is consistent with the characteristics of the mainstream target group.

Therefore, Pinduoduo will become a good platform for trial and error. After all, when the quality of goods is guaranteed to a certain extent, everyone is willing to choose the lower price.

3. Strong sense of scene: pursuit of high cost performance

Because of its clear low-price e-commerce positioning from the early days to now, in Pinduoduo's scenario, the pursuit of cost-effectiveness is the subconscious of all users. In this scenario, users are price-sensitive and pursue cost-effectiveness, so price is still the focus. Marketing factors such as whether the product pictures are good, the packaging is exquisite, and the presentation form is rich are not the main factors.

Pinduoduo's Huang Zheng said: We attract people who pursue high cost-performance. They will buy an Hermès bag and also spend 9.9 yuan on a box of mangoes. This has nothing to do with their spending power.

Although this statement is a bit exaggerated, we must admit that when everyone is advocating consumption upgrades, the pursuit of cost-effectiveness is still the fundamental demand of many consumers, not necessarily the so-called third-, fourth- and fifth-tier cities, or the fifth-ring sinking population in the traditional sense of e-commerce.

A consumer survey report by iResearch Consulting : There is a group of people called "single luxury" people. They spend a lot of money on the things they like, but are minimalists in other aspects. The most typical examples are photography enthusiasts and cosplay lovers.

I was collecting materials before and made a small questionnaire about Pinduoduo. I sent it to some friends around me to fill out. They were mainly white-collar workers in first- and second-tier cities. As an atypical Pinduoduo sample, we can see these data:

Therefore, when it comes to purchasing such minimalist, cost-effective products, this group of users will have this scenario and think of group buying and Pinduoduo, so it satisfies the user's pursuit of cost-effective products.

Development Forecast

I think there is a sentence that can summarize it well: do the right thing according to different goals in different development stages.

Based on the above analysis of users, gameplay, and platform scenario characteristics, we can try to make some predictions and suggestions.

(1) Retention and repurchase are the key points

When the target market is close to saturation, retention and repeat purchase will become the main directions.

Typical methods include: membership, recharge cards, coupons, red envelopes, social triggers, discounts, and timely push of high-frequency consumables.

The appropriate method should be selected here based on the characteristics of the platform users. At present, Pinduoduo has a greater advantage in high-cost-performance products, so I think it is a good idea to push discounted high-frequency consumables at the right time.

(2) Explore non-sharing, shorter-path gameplay

Sharing is just a form, just like Meituan group buying is just a group buying voucher. The form of group buying is not important. The core is - the user's mentality of getting a bargain. As a large number of unrestrained sharing functions overdraw social relationships, it is necessary to explore some micro-innovative ways of playing.

For example: when user A needs to share and is waiting for a group to be formed, his friends can use leveraged red envelopes, that is, pay 3 yuan to deduct 30 yuan to help A successfully complete the group in advance. Of course, there are many details here, and the conversion rate of leveraged red envelopes is the design focus.

(3) Maintaining cost-effectiveness

The platform’s biggest advantage at the moment: price, should be the focus that needs to be continuously grasped, and should be adjusted continuously at different times based on the balance point of interests among merchants, users, and the platform. For merchants, although the profit of a single product has decreased, the store traffic and sales have increased significantly. The faster product turnover cycle can reduce their inventory pressure, which is also what they are happy to see.

Pinduoduo's operations staff said: "We are very clear about the merchant's costs, and we will also compare the merchant's quotes with those of other e-commerce platforms to negotiate a price that is in the interests of consumers, merchants, and the platform. Users pursue high cost-effectiveness, and we will of course do our best to help them save money that they shouldn't spend."

Maintaining high cost-performance ratio is Pinduoduo's ongoing core competitiveness.

(4) Explore social gameplay and build social relationships

The purpose of consolidating social relationships is to improve the overdraft of social relationships caused by sharing and assistance functions, and to help establish symbiotic relationships between highly compatible users . And this kind of social relationship should be light because it is commercialized and fragmented.

For example: add identity tags for friends who repeatedly help you, give them priority to enjoy no-threshold coupons, create group chats for acquaintances with the same category labels, help aggregate users who have sharing needs at different time points, tag products that friends have reviewed, etc.

(5) Upgrading the supply chain to become a true C2B

The real C2B should be reverse customization, that is, a super group.

Here is a quote from Mr. Zeng Ming:

The future business model will be one that is mass customized for consumers.

Taobao Juhuasuan used this model in its early days. Pinduoduo is not a true C2B at present probably because it does not have a good grasp of its supply chain. Of course, this is also a difficult tug-of-war. If this can really be achieved, the overall resource utilization of manufacturers, distributors and platforms will be improved. Then for users, high cost performance and low price are no longer a problem. (The analysis here is relatively macro, the author has limited experience, and I won’t make a high profile, so I’ll leave it to the big guys to discuss)

Therefore, I now have an understanding about the essence of group buying: the group buying model is actually a sense of participation, empowering every consumer, spreading the cost of the platform's advertising channels back to every ordinary user, and finally making everyone feel that they have consumed their own social currency in exchange for the discount, rather than attributing the discount to the poor quality of the product.

For Pinduoduo's current target users, the social cost is low, so the social currency consumed is almost free, so in the end they will feel like they are getting a good deal and do not think the quality of the goods is poor.

postscript:

A friend once said that writing an article is about solving a problem, and that’s true. However, there are many posts with practical skills, and what I would rather output is an analysis and summary, a point of collision of thoughts, and an essential comparison for the next reference.

The complete material collection, product experience, and user research for this article took me nearly a month. At least now almost all of my friends know that I am studying Pinduoduo, trying to analyze it from the implementation level and product basics level, hoping that it will be more practical.

Of course, are some of the bold conclusions I made in the article essential and reasonable? I hope to get more corrections and exchanges.

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

Product promotion services: APP promotion services, advertising platform, Longyou Games