In October 2019, Pinduoduo's market value surpassed JD.com, becoming the second-tier e-commerce company in China. Pinduoduo's "10 billion subsidies" took advantage of the momentum, and almost no one could escape Pinduoduo's warning of "it's really good".

The recent group purchase of Tesla has allowed Pinduoduo to break the user's stereotype of being outside the Fifth Ring Road. Is there anything that Pinduoduo can't achieve?

Friends who switch from Taobao and JD.com to Pinduoduo will be surprised to find that Pinduoduo does not have a shopping cart!

Regarding this setting, some users said that the lack of a shopping cart is simply a tool to urge purchases, while others said it is extremely inconvenient and difficult to adapt to.

Convenient and a great tool to urge purchases

Can't settle with one click, difficult to use, not good

Why doesn’t Pinduoduo have a shopping cart?

This is not only a problem of product logic, but also a problem of consumer habits and culture. Let us delve deeper into the mystery.

1. What do we talk about when we talk about shopping carts?

When it comes to shopping carts, many people’s first reaction is the page on the e-commerce platform that makes people worry.

The concept of shopping cart originated from offline retail entities. It was designed to facilitate customers to purchase multiple or large items and is a tool to enhance the consumer experience. The most intuitive function of the shopping cart on e-commerce platforms is to facilitate the checkout of multiple items.

In addition to the checkout function, the shopping cart has opened up a new world for promotions - online transactions have a real order concept, and shipping fee templates such as free shipping for orders over N pieces/free shipping for orders over M yuan have emerged.

The ways of promotion are also more diverse, with a dazzling array of methods such as full discount, full discount, full gift, M yuan for N items, etc.

Every year on Double 11, shopaholics compete with each other in their wits and courage to make the best shopping decision in the game, but they do not know that it is the existence of the shopping cart that constitutes the underlying logic supporting various promotional activities.

Like Double 11, the shopping cart has transformed from a simple marketing tool into a symbol of consumerism; the shopping cart is sometimes more like a wish list. Add the things you want to buy, the things you like, and the products you are hesitant about.

In the framework of rational thinking, the shopping cart should be empty; however, in most cases, everyone’s shopping cart has inventory, and the shopping cart has assumed a similar function to a favorites - don’t rush, just buy it in the next step.

Compared to favorites, the space in the shopping cart is limited, and the products in the shopping cart must be of higher priority.

This also reflects the calming effect of the shopping cart - if I don’t buy it yet, I can wait. Therefore, "emptying the shopping cart" is similar to completing your wish list, which also sounds more heroic.

Another marketing advantage of shopping carts comes from the endowment effect - the endowment effect in behavioral economics is defined as follows: once an individual owns an item, his or her assessment of the value of the item will be much higher than before he or she owns it. When we add items to the shopping cart but have not checked out, a virtual ownership has been created. When we delete items from the shopping cart, we will have a real sense of loss (loss aversion). In order to avoid this sense of loss, people may choose to empty the shopping cart.

2. Several reasons why Pinduoduo does not have a shopping cart

1. Buy in groups quickly and eliminate the worry of price comparison

Although Pinduoduo cannot let you experience the pleasure of emptying your shopping cart, it can guide you to feel the joy of buying whatever you want.

The core logic of Pinduoduo is group buying, initiating group buying or participating in other group buying. Under the path of buying and buying at the same time, the shopping cart seems redundant and loses its original scene value.

In the scenario of single product shopping decision, the user's purchase decision process is as follows:

One of the most important items is the purchase plan evaluation: to put it simply, it is to compare prices from three stores to see the price-performance ratio, or compare the prices of the same product in different stores; this process is usually carried out in the shopping cart, and the comparison is clear at a glance.

Without a shopping cart, price comparison may only occur on the browsing page after searching for a product, thereby alleviating the price comparison anxiety on the eve of decision-making and directly eliminating the secondary decision made in the shopping cart.

The shortening of the shopping chain has greatly improved the transaction efficiency of single products; and the real-time purchasing status of the group buying page also takes advantage of the user's subconscious herd mentality, thereby promoting group buying.

Of course, although the price comparison anxiety has been alleviated, the "waiting to share" anxiety after initiating a group purchase will not be absent; this mechanism will encourage users to share products with friends to place orders, thereby achieving transaction fission in the process.

2. Favorites, hidden merits and fame

Without the shopping cart, many people criticize Pinduoduo for the single-purchase and single-payment system, which makes purchasing multiple items inconvenient.

However, Pinduoduo's favorites have a one-click settlement function, and the items purchased in one settlement are the starting state of initiating a group order.

Favorites has a profound meaning and is responsible for the most basic function of the shopping cart, which is consolidated settlement!

We can also get some clues from the logo design.

The favorites of Taobao and JD.com are just a few simple characters, while the logo of Pinduoduo’s favorites looks like a shopping bag with a little heart inside. The devil really is in the details!

Pinduoduo, Taobao, and JD’s respective favorites visuals

As analyzed in the previous section on the shopping cart function, the shopping cart and favorites have the same functions to some extent, and the slight difference is the strength of the purchase motivation.

The items in the shopping cart are always just one step away from payment. In contrast, Pinduoduo, which does not have a shopping cart, uses favorites to realize multiple purchases. The mechanism of buying together combined with the low-priced nature of the goods makes the Pinduoduo platform more efficient.

3. Reduce the difficulty of purchase and make it easier to complete transactions

Everything has to start from sinking. Pinduoduo is a typical "surrounding the cities from the countryside" strategy. Many of its early main users were middle-aged and elderly users who had never been exposed to mainstream e-commerce before.

From a product perspective, optimizing the purchasing experience starts with simplifying the process, and it is extremely important to remove steps that have high understanding costs.

"Users in the sinking market usually go shopping, not in large supermarkets with shopping carts. Basically, their shopping scenes are concentrated in small stores or small supermarkets. Shopping carts will increase their cognitive costs.

In addition, this is also related to Pinduoduo's product attributes. Its concept is that the price is very favorable now, so there is no need to look at it again, just place an order immediately. Reducing one operation page reduces the loss rate of a process - regarding the topic of why Pinduoduo does not have a shopping cart, netizens analyzed it this way.

Indeed, it is very important to reduce cognitive costs and lower recognition noise in the initial stage of opening up the situation.

Whether it is the straightforward page design or the product structure without a shopping cart, it must be simple enough to be fast enough, and the transaction volume will increase only when the turnover rate is high. This is also the obvious feature that distinguishes Pinduoduo from Taobao and JD.com.

From the perspective of the "people, goods and place" framework, Pinduoduo's methods of sharing and group buying, bargaining in the circle of friends, and inviting people to collect red envelopes all require communication and cooperation with friends, which enhances the interactive resonance between users.

The goods are also more in line with functional needs and are cheap; users are connected by "group buying" to form a unique environment, in which the shopping cart has no sense of existence.

Pinduoduo has gone a step further in connecting people, while Taobao and JD.com's shopping cart promotion model seems to be more of a one-man show. The group activities such as building buildings and making cakes on Double Eleven that have emerged in recent years are also strengthening the connections between people.

4. Extreme single product thinking

The underlying thinking determines the platform's ideology.

Pinduoduo has a typical single-product operation mentality. It does not have a shopping cart. Compared with the shopping carts of traditional e-commerce platforms such as Taobao and JD.com, it pursues more refined sales, evaluation, and operations of a single SKU, with the goal of making a single product a hit.

Because of its refined single product strategy, the SKUs in Pinduoduo's stores are fewer than those in Taobao and JD.com; the number of single products of Pinduoduo merchants with similar purposes is far lower than that of Taobao, which directly leads to a weak dependence on shopping carts.

Pinduoduo prefers a low-price strategy in product selection, and this low price is not an intervention or guidance, but the result of users' clicks, purchases, and browsing.

Pinduoduo is more like an online version of Costco. Its algorithm technology is equivalent to a buyer, which constantly collects user needs and recommends more suitable products.

You should know that Pinduoduo's total order volume in 2018 has exceeded that of JD.com, and the reason is the high-speed turnover under the extreme single product thinking.

As a latecomer in e-commerce, Pinduoduo also has its own unique direction in the supply chain, which is closer to the essence and cost-effectiveness.

The hundreds of billions of subsidies launched are mostly in cooperation with the brand's authorized dealers. There are no gimmicks, but direct price reductions. Coming from the masses and going to the masses, Pinduoduo's dullness is simple and unpretentious.

Consumption chain of Pinduoduo, JD.com and Alibaba Source: China Merchants Securities

3. Pinduoduo’s operating philosophy

Huang Zheng, the founder of Pinduoduo, once said in an interview with Caijing magazine, "After Pinduoduo became popular, JD.com, Vipshop, and Mogujie all tried similar models. For them, group buying is just a tool to increase GMV. However, Pinduoduo is based on human logic. We understand people through group buying, and we use people to recommend products. Later, we will transition to machine recommendations. There is almost no search in the Pinduoduo app, and there is no shopping cart. You can imagine that replacing the information flow of Toutiao with the product flow is Pinduoduo."

There is no shopping cart, search is downplayed, products are content, and price is traffic.

Simple changes have reconstructed the business logic of e-commerce platforms. Pinduoduo's operating philosophy is indeed intriguing.

Pinduoduo does not want to become the next Taobao or Tmall. Its new form of user interaction makes it the most down-to-earth e-commerce platform.

Pinduoduo's first quarter 2020 financial report shows that Pinduoduo's annual active buyers have reached 628 million; the slogan "300 million people are pinduoduo" should still be fresh in our memory, and now the number of users has doubled; the world has changed dramatically, and now there is no force to stop Pinduoduo from moving forward.

Pinduoduo's wild growth is from the bottom up. After the huge subsidy of 10 billion yuan, it launched a money-saving monthly card membership system, aiming to further improve user stickiness and repurchase rate.

It has surpassed JD.com in GMV and is approaching Taobao, and is about to achieve profitability around 2021.

The change in consumption habits in the post-epidemic era and the return to rational consumption have also left Pinduoduo with ample opportunities. The speed at which Pinduoduo "conquers new territories" is unpredictable, and the height of the ceiling is also difficult to estimate.

Among Internet giants, Pinduoduo has always been the most controversial.

Low prices are both honey and poison. On the one hand, low prices are more in line with the demand for cost-effectiveness, but on the other hand, low prices bring about the stereotype of inferior goods. The model of subsidizing customers has also been criticized, and some people have questioned whether Pinduoduo's business model is sustainable, and some even compare it to Luckin Coffee. Pinduoduo still has a long way to go to break out.

Let’s get back to the shopping cart. What’s interesting is that Taobao’s shopping cart was only launched in 2007.

With further business expansion, will Pinduoduo also add a shopping cart function? Time will give us the answer.

Author: Yu Shengmei

Source: Yu Shengmei