With 80 million users after one year of launch, what is Pinduoduo’s growth logic?

A few days ago, when I was traveling in Guangzhou, I saw an advertising poster in a subway station: Pinduoduo, the shopping app that 80 million people are using!

This made me confused for a moment? 8000W? ! WTF, I’ve never heard of Pinduoduo, and it already has 80 million users? !

I went back to check and was shocked again: it was launched at the end of September 2015... In other words, it has been online for just one year and has 80 million users? !

In the fiercely competitive e-commerce market, Pinduoduo has snatched more than 80 million users from giants such as Taobao and JD.com in one year. Can you believe it?

(The following is the download volume of the Android Market as of November 11th. Yes, you read that right. It has 80 million downloads without counting the App Store…)

My brother is so awesome! The author quickly downloaded it to experience it and open his eyes~

1. Product Usage Process

Simply put, Pinduoduo claims to be a product that focuses on e-commerce + social networking . E-commerce is easy to understand, as Pinduoduo does group buying, but what is e-commerce + social networking? With this question in mind, let’s first take a look at the main usage process of the Pinduoduo App.

For group buying participants, the process of contacting Pinduoduo is generally like this (see the picture below):

1. A friend sent me a link in the group. Wow, it’s so cheap. I clicked on it to take a look!
2. As soon as I came in and saw the products and prices, I was stunned. Are they really that cheap? But what is group buying? There is an introduction to group buying in this H5. Can you click on it and take a look?
3. I see ~ So that’s how it is ~ Join the group!
4. Payment.
5. I received a call from the courier two days later and the goods were delivered! The quality of the product is pretty good, and the price is really affordable! Check out the next app!

For the initiator of group buying, the main process of using Pinduoduo is as follows (see the figure below):

1. Find the product you want to buy in Pinduoduo and click to enter the product details page.
2. On the product details page, you can see that the buy now button in ordinary e-commerce products has become a "X-person group" button in Pinduoduo. I click it.
3. Payment.
4. The group formation has started ~ A group of 10 people. I need to find someone to join the group with me. Share it on WeChat Moments and share it with friends!
5. Then I found out on the APP that the group purchase was successful~Okay, I just need to wait for the goods to arrive~
6. Received!

2. Scenarios and User Portraits

From this simple analysis, we can see that on the buyer side, Pinduoduo’s main users and usage scenarios are divided into two categories:

Scenario 1: User A wants to buy something, so he opens Pinduoduo, finds products that meet his needs, starts or joins a group purchase, and shares it on WeChat to find friends to buy with him.

User category: Active user

Demand: Purchase goods

Pain point: I hope to buy the goods I need at the lowest price

Scenario 2: User B is browsing WeChat and sees a link sent by a friend to the group. User B can buy a good product at a very low price by joining a group purchase. Therefore, User B decides not to miss out on the offer and clicks to join the group purchase.

User category: Passive user

Demand: Encountering products you want to buy

Pain point: I don’t know what to buy, and it takes a lot of time to search for it.

3. Product Analysis

From the above user portrait, we can see that as a platform product, Pinduoduo's user groups are divided into three categories: active users, passive users, and merchants. Focusing on these three types of users, Pinduoduo’s core business logic is as follows:

Existing e-commerce platforms are essentially Google -style shopping platforms that focus on the relationship between buyers and merchants. Buyers actively find the products they want to buy, which makes the traffic center the various platforms. Therefore, platforms such as Taobao and JD.com hold activities and advertisements, and try various ways to obtain more traffic, because traffic is their lifeblood.

Pinduoduo is different. It has taken a completely different path. We want to be a Facebook-style shopping platform, focusing on exchanges and communication between buyers. Everyone is a traffic center!

Therefore, Pinduoduo divides users who shop each time into two parts: active users and passive users, each of which has its own responsibilities: active users are responsible for finding products and sharing them with friends after starting a group, while passive users see a link sent by active users on WeChat, and at first glance, they think, wow, this product is of good quality and low price, so they buy it!

The most important core point of Pinduoduo's business logic is:

1. Why do users want to share? He is buying something properly. Will he be happy if you increase the cost for him?

The simplest reason is greed for bargains. Of course, if it’s just greed for bargains, that’s not enough. Otherwise, wouldn’t all the public accounts that claim to reduce prices by forwarding have already developed into platforms? Join a group or help a friend! I saw an affordable product and shared it with my friend to see if he needs it. It’s like doing him a favor, right? He saved the time of picking things and bought something economical, killing two birds with one stone~

2. Why would passive users join a group? Instead of using Taobao and JD.com to shop?

As for passive users, they actually don’t know what they need or what they want to buy. It takes me a long time to browse Taobao and JD.com before I can find what I want. It’s too troublesome. ~ Now there is Pinduoduo, eh? I don’t have to go through so much trouble anymore. Occasionally, a friend will send a link in the group, which shows good quality and low price. I don’t have to spend time choosing. It’s great~ buy, buy, buy!

After solving the above two problems, every user becomes a traffic center, which naturally gives Pinduoduo the following two major competitive advantages:

1. Acquire social traffic and easily reach users.

By allowing users to share on WeChat and join forces to buy at a discounted price, the dual goals of attracting fans and group buying are achieved. Pinduoduo does not need to think about how to obtain traffic like other e-commerce platforms. Instead, it directly utilizes the traffic of the super app WeChat and quickly acquires users through the transmission of social chains, with low traffic acquisition costs.

2. Group buying model, low product prices.

Similar to group buying, it brings more users together and improves the bargaining power between users and merchants, thereby obtaining product discounts to the greatest extent and purchasing better things at a lower price. Moreover, due to the lower traffic costs, the advertising fees that merchants on Pinduoduo need to pay are correspondingly reduced, so they can naturally sell goods at a lower price to attract users and obtain more transactions.

In the field of e-commerce, these two characteristics are enough to leave other competitors far behind.

4. Product Prospects

1. Mutual constraints between giants.

From the above description, we have learned that Pinduoduo is a product that relies heavily on social relationship chains and is currently extremely dependent on WeChat for survival. When I was looking at Pinduoduo's information, I also noticed a very interesting piece of information - the lead investors in Pinduoduo's Series B financing included Tencent.

In the mini-program unveiled by Zhang Xiaolong a few days ago, Pinduoduo was also included in the first batch of WeChat mini-programs .

This is intriguing. Tencent is the undisputed leader in the social networking field, just as Alibaba is the leader in the e-commerce field. Could Pinduoduo be a nail planted by Tencent in the e-commerce field, using the social + e-commerce approach to interfere with the development of Alibaba's e-commerce?

So there are a few questions that we need to think about: What impact will Tencent have on Pinduoduo? How will Pinduoduo use the resources given by its father? Can Pinduoduo accomplish its mission and impact Alibaba’s e-commerce empire?

2. The brutal competition in the e-commerce field.

Pinduoduo already has tens of millions of users in just one year, and judging by its growth curve, it still has great potential. It received Series B financing in July this year and acquired Pinhaohuo in September. It is firmly the leader in the social e-commerce field of group buying.

In this case, the only competitors left are Taobao, JD.com, Vipshop, Meili United and other e-commerce giants. How will Pinduoduo compete with all parties? Will it be a failure and a flash in the pan, or will it break through the siege and amaze everyone?

3. The difficulties facing Pinduoduo.

In the more than one year since Pinduoduo was born, a lot of negative news has been exposed:

• The buyer received rotten fruit, which means there is a quality control problem on Pinduoduo;
• Buyers receive counterfeit goods, which is a problem that will inevitably arise when e-commerce platforms develop to a certain stage;
• There is a situation of deceiving consumers in the lucky draw on the homepage, which should be due to the lack of coordination between the product department and the business department;
• …

Whether these problems can be reasonably solved during rapid product development and iteration will directly determine how far Pinduoduo can go.

If you have different views on the reasons for Pinduoduo's rapid rise, and if you feel that Pinduoduo will encounter other key problems in its development that I have not mentioned, please leave a message to communicate.

Mobile application product promotion service: APP promotion service Qinggua Media advertising

The author of this article @洪仕博 is compiled and published by (APP Top Promotion). Please indicate the author information and source when reprinting!