Detailed explanation of the core of Pinduoduo’s gamification operations!

The street stall economy suddenly became popular overnight, and the company that first brought "street stalls" to the Internet is also having its own highlight moment.

On May 13, as of the close of trading on Tuesday Eastern Time, Pinduoduo's market value surpassed JD.com, making it the fourth largest Internet company in China.

On May 22, Pinduoduo released its first-quarter 2020 financial report. The financial report shows that in the 12 months ending March 31, 2020, Pinduoduo's annual active buyers reached 628 million, a strong increase of 42.9 million in a single quarter, continuing its rapid user growth momentum. Compared with the same period in 2019, the number of active buyers increased by 185 million.

Against the backdrop of Chinese stocks queuing up to return to Hong Kong for listing, there were even rumors that Pinduoduo was going to have a second listing. Pinduoduo's response was full of tycoon spirit: the company's cash flow is healthy, and its current cash reserves and revenue growth rate are sufficient to allow the "10 billion subsidies" to continue for many years, so there are no plans for a second listing for the time being.

Product strategy expert Liang Ning has a widely circulated article titled "Why Pinduoduo Rises". She quoted Chen Nian's words and believed that "the most real consumption changes come from street stalls." Street stall goods have no brand, so there is no brand premium, and what users want is the product itself.

From the perspective of user experience, such things are completely different from the brands in shopping malls that make people feel very expensive as soon as they enter. Street goods will not make people feel inferior at all, but will make users feel superior.

Therefore, she believes that Pinduoduo has solved the difficult problem of "how to place the low-end supply chain and low-consumption population" and released the public's demand for street goods through the Internet.

This may be somewhat different from the position of Pinduoduo's founder Huang Zheng. He believes that Pinduoduo's core competitiveness is "making shopping feel like a game." "Many people simply understand Pinduoduo as social e-commerce and cheap, which is a profound misunderstanding of Pinduoduo's business model.

Everything is based on human logic. Goods are matched according to people, allowing the right people to buy the right things in the right scenarios and enjoy their purchases, creating a never-ending shopping carnival. This is the secret of Pinduoduo. ”

Most product people understand the concept of e-commerce gamification as "adding a sign-in function with rewards, adding a few small games, and adding a leaderboard." However, Pinduoduo's gamification is based on a deep insight into user psychology. Otherwise, it would be difficult for it to carve out a path in the squeeze between Taobao and JD.com.

Stepping out of abstract concepts and returning to the product itself, we can use the "Octagonal Behavior Analysis Method" to disassemble the core of Pinduoduo's game.

The Octagonal Behavior Analysis Method comes from the book "Practical Gamification". The author Yu-kai Chou believes: "Every successful game is supported by a core drive, which affects our decision-making and behavior. Different game techniques are driven in different ways, some through inspiration and empowerment, and some through manipulation and obsession. If there is no core drive, there will be no motivation, let alone behavior."

Based on this point of view, he summarized the user's psychological quantification into 8 core driving forces and created a gamification design framework - the Octagonal Behavioral Analysis Method, which designs and evaluates a gamification product from a psychological perspective.

Next, we will use this method to disassemble the gamification core of each module of Pinduoduo.

(Graphic by Hefan Finance)

As shown in the figure above, most of Pinduoduo's eight driving forces have performed well. Next, we will analyze each dimension of this model in detail.

01 Core driving force: epic meaning and sense of mission

"The core driver of epic meaning and mission is that players believe that what they are doing is more important than the thing itself, so people voluntarily invest a lot of time and energy."

Charity Poverty Alleviation

Any major e-commerce platform will launch its own public welfare project, including Alibaba and JD.com, and the "poverty alleviation model" has also become a standard for leading merchants. It is not difficult to understand why merchants do this. Similar answers can also be found on Zhihu, "If a platform will set aside part of your shopping funds for charity, and the product prices are similar to other platforms, will you buy on it?" Most of the answers are yes.

Take Pinduoduo as an example. One of the stories it emphasizes is "We spend 9.9 to buy a box of fruits, which not only satisfies our pursuit of high cost-effectiveness, but also helps farmers who have unsalable products solve sales problems." From the perspective of merchants, consumers feel a sense of honor and mission in the process of participating in public welfare, which will become their motivation for consumption.

(Picture from the Internet)

In Huang Zheng's discourse system, he often emphasizes the sense of mission that underlies his original intention of starting a business.

In 2006, with the help of Duan Yongping, who later became his angel investor, Huang Zheng got the opportunity to have lunch with Buffett. He said that this meeting left a deep impression on him: "It is not only about making money, but also about knowing why you make money."

Shortly after he founded the Dream Games company, he stayed at home for a whole year due to severe otitis media. During this time, he began to rethink his future direction. "After I had completely free time, I started thinking whether I should continue to start a business or do investment?" "Actually, I just hope that what I do will have a bigger impact."

He said that from then on he began to focus his attention on the areas outside the Fifth Ring Road, and saw the helplessness of farmers as their vegetables rotted in the fields, and also saw the difficult lives of those at the bottom of society whose monthly salary was less than 1,000 yuan.

This is very similar to what Jack Ma has emphasized since the first day of his business: to make it easy to do business anywhere.

Although every entrepreneur can tell a story about a grand vision, Pinduoduo integrates poverty alleviation into the supply chain, making it less like a "consumer sentiment" routine.

02 Core Drive: Achievement and Progress

"Progress and a sense of achievement are the intrinsic driving force for users to make progress, learn skills and overcome difficulties. It is also the source of motivation for users to focus on their career growth path and enthusiastically learn new skills, motivating users by demonstrating progress and growth."

First, Pinduoduo rewards users through progress bars and physical items.

Since cultivation games have a low threshold for production and are easy to imitate, almost all leading players have launched their own game products. The reason why Duoduo Orchard stood out from other vegetable-growing games such as Tmall Farm and Plant Beans and Get Beans, and achieved 50 million daily active users at the beginning of its release, is because it grasped the psychology of users.

In the progress bar gameplay of Duoduo Orchard, if users want to grow a tree to maturity, they need to water it more than 400 times in total, and water droplets can be obtained from tasks. In order to allow users to perceive their progress in a timely manner, Duoduo Farm breaks down the process of cultivating a tree into several stages, namely "germination, flowering, fruiting, and maturity", and lets these four stages follow from easy to difficult.

Taking the germination stage as an example, each watering activity of the player can increase the progress bar by 20%, and it only takes five times of watering to enter the next stage. At this stage, the system will hide the subsequent 300 or so watering processes so that players will not give up too early because the goal is too far away. Since players can see obvious results on the progress bar every time they water the plants, "achievement and progress" will become the main driving force for players to persist.

When the fruit tree enters the fourth stage "mature", each watering action by the player can only increase the progress bar by less than 1%. At this stage, since the goal is far away, achievement motivation is difficult to maintain user stickiness, and "scarcity and desire" will become the key driving force for user retention.

The reason it emphasized was that "players have already crossed three stages of challenges to get the prizes. If they give up at the last stage, all the time and rewards they have paid before will be void."

Another successful example driven by "achievement" and "progress" is Alipay's "Ant Forest", which has become the only strong driving force for many people to open Alipay besides payment scenarios.

Users can generate energy through payment, walking, shared bicycles, public transportation, payment, etc. The corresponding energy can be collected in Ant Forest, which encourages users to open this relatively low-frequency payment application, and can also "steal" green energy that Alipay friends have not collected in time.

These accumulated energy values ​​can be used to plant trees in the cloud. Users can choose tree species and planting areas. Each tree has a unique number, which requires users to water the trees to steal energy. The user's usage time increases continuously in this process.

Pinduoduo’s launch of the “physical exchange” function is also an innovation in gameplay. This gameplay breaks the boundary between reality and virtuality. Other vegetable-growing games remain at the virtual reward stage, and the introduction of physical rewards is undoubtedly a dimensionality reduction attack on the e-commerce circle.

Ant Forest also combines virtual tree planting with real-life greening. We have already mentioned in Core Driving Force 1: Epic Meaning and Sense of Mission that charity is a powerful fulcrum. During the 2020 Spring Festival alone, from February 8 to February 18, Ant Forest's 267 million users generated 92,673 tons of green energy and planted 879,880 Haloxylon ammodendron trees, 496,822 Salix psammophila trees, 847 Larix gmelinii trees, and 365 Populus euphratica trees.

At the same time, Pinduoduo also has a complete task loop. Take “bargain and get it for free” as an example, “get a balance bike for free for a limited time”, “you have received a bargaining coupon”, “bargain another 10 yuan and you can take the scooter away at a subsidized price”. In the Pinduoduo task chain, random push is the starting point of all behaviors. Users will receive various random tasks while browsing the page.

The prize selected by the user will be used as the current task target, and the task content is to find N people to chop the prize, and regardless of whether the user completes it or not, Pinduoduo will push new tasks to the user.

The sense of accomplishment generated after completing a task will motivate users to continue to accept tasks and continue the task loop. The task chain is the core reason for shopping addiction. From the perspective of merchants, this task loop can increase user stickiness and allow users to spend more time on Pinduoduo. This is also the core advantage of Pinduoduo's staggered competition with platforms such as Taobao and JD.com.

It can be seen from this that in terms of operations, Pinduoduo did not just rely on WeChat traffic to start its business. It is not the only partner that has received support from WeChat traffic. It has its own ways of taking over traffic and optimizing the conversion entrance of the activity page.

03 Core Drive: Creating Empowerment and Feedback

"Creative empowerment and feedback can drive players to fully immerse themselves in the creative process, constantly triggering their own creativity and deriving almost unlimited possibilities."

What kind of creativity does an e-commerce platform require?

After all, Pinduoduo is not a gaming company; its core is still e-commerce. If players are tired of the current gameplay, they will either leave directly or switch to another platform for shopping. In order to keep the game fresh for users, it needs to come up with creative ways of playing that allow players to “entertain themselves”.

DuoDuoAiClash is a game based on creative driving force. This gameplay combines consumption and games and is divided into three processes: "Select prizes", "Play games for points", and "Redeem prizes".

When you enter the interface of Duoduoai Elimination, you will see an eye-catching WeChat red envelope. After loading, there will be a prompt: you can participate in the first lottery after passing the first level, and you will definitely win cash, which will be deposited into your account via WeChat. This is to achieve user retention through cash incentives.

It also allows users to win diamonds with the help of friends, which induces sharing. In the second level, if you win a WeChat red envelope, you need to scratch the card to receive WeChat change, which again induces users to share and fission. During the card scratching process, information about other users who have successfully invited you and received WeChat red envelopes will be displayed in a scrolling manner.

On the surface, players are fully authorized to manipulate the game and can choose not to attract new users to Pinduoduo through social sharing, but you are inadvertently being influenced by the game setters.

There is a time limit of two hours for inviting assistance, and there is also a countdown prompt at the bottom of the interface, which will make people feel a sense of urgency. In addition, like other elimination games, Duoduoai Elimination also has a built-in reminder function. If the player does not perform any operation within a few seconds, the game will prompt possible pairing methods, but this is usually not the best way. If you blindly accept the prompt, you will most likely lose the game.

The reason is simple. If a player is stuck on the game interface for a while, he may give up the game and do other things, but if he loses, his first reaction is naturally to start over. Through the built-in reminder function, Pinduoduo has achieved the goal of unleashing players' creativity while avoiding player loss caused by being too hardcore.

In addition, unlike the design buttons for e-commerce shopping, the exit button of Duoduoaixiaochu is relatively hidden, and you need to click the settings button in the lower left corner to find the exit. If you click, it will display information such as WeChat red envelopes waiting to be collected, thereby reducing user loss.

04 Core Drive: Ownership and Possession

“Ownership and ownership is the fourth driving force of gamification in Octagon Behavioral Analytics, which stems from our desire to increase and protect what we own.”

Choose the prize first and then work hard? Full of scheming

In Pinduoduo, all mini-games allow users to choose prizes first and then encourage them to complete tasks.

Taking Duoduo Dream Factory as an example, users can enter the product selection interface through the homepage-Duoduo Make Big Money-Entertainment Center. Users need to choose their favorite products and then confirm the delivery address. This is similar to the ordering process on shopping platforms such as Taobao and JD.com, but Pinduoduo does not want to give out prizes directly. It just wants to plant a clue in the minds of users.

Through these steps, merchants can establish a subconscious cognition on the inner and emotional level of users, allowing users to regard the selected products as already their own.

Similar to Duoduo Orchard, Duoduo Dream Factory is divided into three stages. After users select products, they need to accumulate the "battery progress bar" by completing tasks. Among them, the difficulty of the task is proportional to the amount of electricity harvested. Simple tasks such as signing in and browsing products can only earn you about 5 points of electricity, while tasks such as group buying and shopping earn electricity based on the amount, at a ratio of about 1:25.

A long-term Pinduoduo user told Hefan Finance, "In the game mode of Duoduo Dream Factory, the amount of electricity you get only through placing orders is the largest, and the amount of electricity you get through other channels is negligible. When you play to the third stage, you will know that it is impossible to get it for free by completing tasks. It usually costs more than 100 yuan to get a two-star prize."

Duoduo Dream Factory also has a time limit. If the user fails to complete the goal within the specified time, he or she will not be able to obtain the prize. When the redemption time is about to end, the foreshadowing laid by the merchant before will be triggered (see Core Drive 8: Loss and Escape).

Among them, "sense of ownership" and "loss avoidance" generally work together. We can assume that if you lose two kilograms of apples that have nothing to do with you, you will not feel anything, but if you see that the two kilograms of apples that belong to you are about to be lost, you will definitely find a way to get them back.

05 Core driving force: social marketing and relevance

"Social influence and relatedness refers to the way other people's thoughts, actions or words affect the activities we do, including team tasks, social proof, social feedback and other forms."

Social fission cannot rely solely on bargaining

For Pinduoduo, social elements are not only a way to attract users and solve traffic problems, but also an important part of the user shopping experience.

Before the launch of the Pinxiaoquan function, Pinduoduo's social functions were mainly concentrated in the two modules of "group buying" and "bargaining for free". Both social modes have a strong purpose - bargaining, that is, encouraging users to use their social relationships to share and attract new users through low-price stimulation.

Taking “bargain and get it for free” as an example, users can only get the product for free if they bargain down the price to 0 yuan within 24 hours. But there are quite a few tricks involved. We can cut 90% of the price in the first cut. The closer we are to the target, the less we will cut. In the end, we may only be able to cut one cent each time.

"In order to bargain for a sweeping robot that originally cost nearly a thousand yuan to zero, I not only joined several bargaining groups, but also asked my friends to help me bargain. I even went to the subway station with my friends and asked strangers to help me bargain," a user who participated in the "bargain and get it free" event told Hefan Finance.

For most users, "bargaining" is a frustrating social experience. On major social media platforms, there are even posts asking, "How to refuse someone from bargaining on his/her behalf on Pinduoduo?"

When billions of subsidies have attracted high-spending people from first- and second-tier cities to Pinduoduo, the old social model that helped Pinduoduo get started will find it difficult to adapt to new customers' demands for shopping experience. "Reducing the burden" on consumers has become a pressing issue that needs to be addressed.

To this end, Pinduoduo made two attempts - group buying and small circle buying, which means that Pinduoduo began to transform from bargaining-style social networking to interactive social networking.

As the social link with the highest touchpoint frequency in shopping, the group buying model was the first to change. Users no longer need to invite acquaintances to group orders through WeChat, QQ, etc. Instead, they can directly form groups with strangers. Consumers can enjoy price discounts without consuming any social and time resources. This adjustment has reduced the adverse impact of the fission model on the shopping experience to a certain extent.

Pinxiaoquan is a new social module launched by Pinduoduo at the beginning of the year, which can be compared to the Moments function of WeChat. Relying on the address book, users can not only like, comment, and follow purchases, but also learn what products their friends have bought. The Pinduoduo team said, "Pinxiaoquan is intended to encourage consumers to share their real shopping experiences with friends, which will help complete the identification process of 'separating the false and retaining the true' from the consumer side and reduce the decision-making cost of users."

This is an attempt by Pinduoduo to improve the shopping experience, but judging from feedback from netizens, privacy and security are the focus of attention. A Zhihu user complained about Pin Xiaoquan, "My purchase information was exposed without my knowledge", "My WeChat Moments and address book were all captured by the system", and "Group orders are synchronized to Pin Xiaoquan by default."

06 Core Drives: Scarcity and Desire

Scarcity and desirability refer to the fact that people want something simply because it is rare or not immediately available.

What Pinduoduo wants to fight is the inherent concept that "cheap products are not good".

As the saying goes, cheap goods are not good, and good goods are not cheap. This statement is not an absolute truth, but a misconception caused by the psychology of scarcity.

When people talked about Pinduoduo in the early days, "cheap, fake" were the most frequently used keywords. This is indeed related to the business model of Pinduoduo when it started, but part of it is also the preconceived impression of buyers. When users actually buy fakes, this impression is confirmed and reinforced.

If Pinduoduo, which started out in the low-end market, wants to reverse this concept, it must work hard to break away from the concept of "low-end market, cheap". Therefore, it strives to emphasize the concept of cost-effectiveness, which is exactly the same as the "ultimate cost-effectiveness" that Xiaomi has always emphasized.

Since the products on Pinduoduo themselves lack scarcity, Pinduoduo creates this scarcity through "rest torture + anchor juxtaposition".

After users enter the Duoduo Orchard interface to claim water drops every day, the game will inform users that "the water drops have been used up and they can only claim water drops at 7:43 the next day." The water drop gameplay draws on the "torture rest" idea in game design, which interrupts the user while they are performing the expected behavior and makes a time agreement, so as to keep users sticky to the game through the cultivation gameplay.

At the same time, torture breaks are often used in conjunction with anchoring. When the user has used up all the water drops, the system provides the user with two options: either stop and wait, or complete the desired tasks in the game (complete information, watch live broadcasts, browse products, etc.) to obtain water drops.

07 Core Drive: Uncertainty and Curiosity

"Unknownness and curiosity are the main reasons why we are obsessed with unpredictable experiences."

The homepage is the face of an App, and the platform's operating strategy can be seen from an App's homepage. Compared with the strong searches on the homepages of Taobao and JD.com apps, the “Limited Time Flash Sales”, “Love Shopping”, and “9.9 Special Sales” on Pinduoduo’s homepage all emphasize one concept, which is “weak search”. In an interview with Caijing, Huang Zheng said, "There is almost no search in the Pinduoduo app, and there is no shopping cart. You can imagine that Pinduoduo is the same as replacing the information flow under Toutiao with the product flow."

The module on Pinduoduo’s homepage will randomly push discounted products to users, and the pushed products will also be updated over time. On the surface, this is the business logic of "goods find people". Pinduoduo provides users with a "shopping-style" shopping experience through its "one thousand faces for one thousand people" recommendation algorithm and social recommendations.

In fact, the reason why the goods-find-people model works is because the temptation of low prices can bring surprises to users. When users browse the homepage and find that a Playboy top that costs hundreds of yuan in the market is only 17 yuan, they will have a "WOW" feeling. The sense of accomplishment they have gained will encourage users to continue exploring new discounted items. This is the shopping closed loop of "gaining a sense of accomplishment - seeking the unknown - gaining a sense of accomplishment."

A Weibo user told Hefan Finance, "As a student, it's quite interesting to browse Pinduoduo when I have nothing to do, because I can often find the daily necessities and snacks I need. These things are not pitfalls and the prices are cheap."

It can be seen that if the exploration behavior cannot bring users any sense of accomplishment or benefits, they will often be keen on the "people looking for goods" model because it saves time. However, if users can really find the goods they need and with high cost-effectiveness while shopping in the mall, this will not only become their motivation to "shop around", but the exploration behavior itself will also enhance their shopping experience.

In addition, the lottery model is also one of Pinduoduo's most widely used marketing models. When users enter Pinduoduo's homepage, they will randomly receive cash red envelopes or discount coupons as rewards. Although the amount may not be large, it is enough to motivate users to log in to Pinduoduo.

Users can receive a random amount of sign-in money when they enter the cash sign-in interface every day. When the sign-in money accumulates to a specified amount, it can be cashed out. Pinduoduo has previously launched a "one cent to win a big prize" game, where users can pay 1 cent to draw an Apple phone worth around 5,000 yuan. If they fail to win, the system will automatically refund the money.

Users' mentality of taking chances has made lotteries a tried and tested marketing method for many businesses. Even if the probability of winning is very low, users still think "Will I be the lucky one" when participating in the lottery. Pinduoduo’s achievements tell us that even the most outdated marketing models can be useful as long as they hit the user’s motivations.

Huang Zheng also complained about Pinduoduo's lottery model in an interview with Caijing, "Lottery and red envelope grabbing are the simplest entertainment behaviors. This method is very crude, but we are indeed trying to integrate consumption and entertainment."

08 Core Drive: Loss and Avoidance

"In most cases in the real world, human behavior is motivated by the fear of losing time, energy, money or other resources. Under the influence of loss and escape, we will refuse to give up and will never admit that everything we have done so far is useless."

When new users enter Pinduoduo for the first time, the marketing game based on the motivation of loss and escape has already begun. Pinduoduo will automatically pop up a 1 yuan purchase page for new users with a countdown at the top of the page. You can purchase the product for only 1 yuan within the specified time.

This is the first time that Pinduoduo has induced users to consume by offering low prices. If a new user wants to give up the purchase, the system will pop up a prompt box with the words "Are you sure you want to give up the 1 yuan purchase qualification?" in large letters. The point Pinduoduo wants to emphasize is, "If you miss this purchase, you will lose a rare opportunity."

Below the prompt box, Pinduoduo used the herd mentality to tell users that "144,000 people have already grabbed the product." The merchant hopes to use this to dispel users' doubts. If the user still wants to give up the purchase at this time, he must click on the small line of words below "Give up one-yuan purchase qualification".

Through these actions, Pinduoduo is constantly conveying to users the concept that "if you don't buy, you will lose money." Through a prompt box, we can see Pinduoduo’s “marketing routine” based on “loss and escape mentality”.

A similar form also appears in the "bargain and get it for free" module. In Pinduoduo's bargaining group, some netizens shared their bargaining experiences. "I invited hundreds of people to help bargain for electric cars. At the beginning, each person could bargain for about 10 yuan, but in the end, they could only bargain for one cent."

Pinduoduo's marketing method belongs to the "sunk cost prison" game mode. When we have paid the costs of time, social resources, etc. and are very close to success, it is difficult to give up previous efforts. This is also where the sunk cost prison function is powerful. When the user's bargaining progress has reached 98%, even if the remaining 2% is difficult to achieve, most users will continue to perform the merchant's expected behavior because users do not want to experience the feeling of loss of everything.

09 Conclusion

Relying on the gamification of e-commerce, Pinduoduo has created a new blue ocean "outside the Fifth Ring Road". Following the eBay and Amazon models, the Pinduoduo model has also become synonymous with gamified e-commerce. In his 2020 letter to shareholders, Huang Zheng stated, "In the new world where the boundaries between virtual and reality are gradually blurring, the distinction between human material and spiritual needs is also becoming increasingly blurred." This is consistent with Huang Zheng's speech at the listing press conference on the evening of July 26 (Pinduoduo is committed to creating a new space that integrates the online virtual space and the real world). This world that is free from reality and fantasy may be the true appearance of the gamification empire in Huang Zheng's eyes.

The reality Huang Zheng has to face is still cruel. Under the trend of short videos, the live streaming sales model has broken Pinduoduo's monopoly on gamification operations; JD.com and Taobao are also eyeing the "within the Fifth Ring Road"; it also needs to get rid of the label of "full of fakes" at a faster speed, otherwise the user's sense of accomplishment will be greatly reduced.

Author: Wang Zijian

Source: Hefan Finance (ID:daxiongfan)

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