I will use Amap, Zhihu , LeTV, etc. as examples to break down the dimensions of growth strategy. Below are the five dimensions I have summarized.

1. Single point breakthrough

Let me take Gaode Map as an example.

We all know that in the past decade or so in China, the number of private cars has grown rapidly. If you are driving, you must know the road. Therefore, with the rise of mobile devices, mobile maps and mobile navigation have gradually become a necessity for many car owners. Even many friends who do not have cars will open their mobile maps for navigation when they take a taxi. In this case, the map becomes a very exciting entry point.

More than ten years ago, I just bought a car. At that time, there were many map software on the market. I tried many of them, but the experience was not as good as the one I used last time, Gaode. Later, I gradually became a loyal user of Gaode.

One day, I suddenly realized that Amap is the perfect connection point between people and location-based businesses. For example, when I first searched for a restaurant on the map, I found a group purchase coupon under the map location of the restaurant; later I searched for a cinema and found that I could buy movie tickets directly below; later I searched for a hotel and was able to complete the hotel reservation directly through the map. The access to these businesses is eye-opening for me. I should say that this is a perfect business combination.

Everyone knows that in order to develop business these days, you need to advertise, but there are many different ways to advertise. The more precise, the better the effect and the higher the cost-effectiveness. Amap’s approach of linking people and businesses is very accurate and will not be annoying. So I think Amap has found a good entry point, created a very good user experience, and linked a series of life service businesses from this entry point.

In my summary, this is a single point breakthrough and the entry point for the business growth strategy. When you are growing your business, you can also think carefully about where the perfect entry point is for your business. Sometimes it may not be the product you want to sell.

2. From the inside out

Next, let’s look at the second dimension of growth strategy, which is from the inside out.

Practice your inner strength first, then grow rapidly. Zhihu is actually a very classic case in this regard.

In 2011, when Zhihu was first founded, it invited a group of outstanding celebrities, including Kai-Fu Lee, Lei Jun, and Xu Xiaoping, to join the Zhihu platform to produce content and interact with everyone in question-and-answer sessions. They are the first batch of seed content producers carefully invited by Zhihu. In addition to them, there are many content consumers who are also content producers because they may ask questions and interact. They are also Zhihu's selected seed users.

At that time, Zhihu was not open for registration and registration had to be completed through an invitation code. The invitation code is not open to the public, but is only distributed within the circles of seed users and big names. In this case, the quality of the entire group is very guaranteed. During the approximately two years of closed operation, Zhihu has accumulated a large amount of high-quality content through its celebrity and seed user groups.

After 2013, Zhihu entered the open registration stage. At this time, the number of Zhihu users inevitably began to grow explosively. The consequence of the explosive growth was that the content and user quality of the platform became uneven.

So Zhihu started to select content in a very timely manner and launched products such as "Zhihu Daily" to help everyone recommend high-quality content.

At the same time, Zhihu also began to launch the so-called content evolution mechanism. This mechanism originally determined whether an article would receive more exposure and recommendations, or be folded, based on the number of likes or dislikes it received. In this way, high-quality content can be seen by more people, and low-quality content will naturally lose traffic gradually.

After this stage, it can be said that Zhihu entered a period of rapid growth, and then its greater explosion was in 2015.

Zhihu's earliest fields were IT and finance (because its seed bigwigs were mainly in these industries). Since 2015, it has rapidly expanded to more fields, such as literature, art, music, and film. Each field has a large number of interested users. Therefore, its content and consumers have grown as the field has expanded, and Zhihu's users have entered a stage of full-scale explosion.

Amid the outbreak, users and content have become even more mixed. So Zhihu then carried out two very critical operations.

1. One is to recommend high-quality content. Based on an article's opening rate, completion rate, bounce rate and other article reading indicators, we can determine whether the article is of interest to most people. If it is a very high-quality article with very good indicators, it will be recommended to more people. Today's Toutiao and Douyin also adopt this mechanism.
2. The second is the anti-spam system launched by Zhihu. Automatically identify spam content and junk ads, and even block accounts that post these contents.

In this way, through content recommendation and anti-spam systems, Zhihu has ensured the content quality of the platform, and has prevented its tone from declining too much despite the explosive growth of content.

The last stage of Zhihu’s growth was the monetization of knowledge in 2017.

This has a lot to do with the overall environment. Consumers' copyright awareness and the government's copyright management are constantly developing at this stage. In the early days, people had a weak awareness of paying for knowledge, but by 2017, the atmosphere and habit of paying for knowledge were gradually taking shape. With the efforts and promotion of knowledge payment platforms such as Himalaya, people are gradually willing to pay for knowledge.

At this time, Zhihu turned to knowledge monetization at a very timely moment. Through paid bookstores, live lectures, paid columns, etc., the platform quickly entered the monetization stage.

Throughout the development process of Zhihu, the development stages are very distinct, and the tone of the platform has always been effectively controlled. Finally, the business was monetized at the right time. It should be said that this is a very perfect growth from the inside out.

3. Anchor binding

Next, I will explain “anchor binding” to you through the case of LeTV.

The case of LeTV is very special. It is on the verge of being delisted recently. But 16 years ago, LeTV's expansion strategy was actually a huge success, and its failure in recent years was mainly due to the fact that its diversified business development strategy expanded too quickly, which was the result of it "running blindly" on the edge of a cliff in a business field in which it was not good at.

What I want to talk about here today is mainly its business growth strategy before its peak period 16 years ago.

Looking back at LeTV’s development process, LeTV was founded in 2004. In the following years, LeTV began to purchase copyrights in large quantities. At that time, copyrights were still at a very low price, and the copyright prices of all music, movies, and TV were very low, so LeTV spent a lot of money on copyright layout.

By 2009, the Chinese government began to vigorously strengthen Internet intellectual property protection. Copyright prices began to soar rapidly, and the copyright assets owned by LeTV also appreciated rapidly.

In 2010, LeTV went public, and then quickly expanded into film and television, literature and art, sports and other fields. During this process, LeTV used copyright accumulation as its development foundation and continuously expanded its user base through content.

In 2015, LeTV took a more bold move - launching LeTV large-screen smart TVs at extremely low prices.

I still remember how surprised I was when I first heard about LeTV TV. At that time, flat-screen large-screen TVs were very expensive. When the screen size, screen effect, resolution parameters and other conditions were similar, LeTV's price might be only half of similar TVs on the market or even less.

Later, I carefully observed and thought about the purpose of LeTV TV's pricing strategy, and then found that this was actually a key anchor point in its development strategy at the consumer end.

Television has several major features:

1. durable. Consumers buy a TV and can often use it for 5-10 years, which is much longer than other electronic products such as mobile phones.
2. high frequency. Most families turn on the TV every day.
3. The audience for television is usually an entire family.

In this way, when consumers buy LeTV TVs, it is like LeTV has opened a "window" in this family, and the family is bound to LeTV, just like an anchor. I call this "anchor binding".

Once a large number of users are bound to LeTV TV, there will be a wide variety of means of monetization. LeTV can sell memberships, advertise on TV, charge for content, engage in e-commerce, charge for listing apps on the TV app store or provide paid recommendations, and conduct brand cooperation and commercial promotion through content.

In summary, as long as users are on this platform, there are many ways to keep these users engaged and continue to monetize this traffic.

Although LeTV is no longer a prosperous company, we can see that Xiaomi is actually adopting a similar approach. I give this example because I think LeTV is a very courageous pioneer, and it has creatively created the “blade-rack” model of the content industry in China.

4. Group Extension

Next, let’s take Pinduoduo as an example to look at the fourth dimension of growth strategy – group extension.

For many years, we all believed that the two-horse race in the e-commerce industry (Taobao and JD.com) would never be shaken. However, with the rapid rise of Pinduoduo, the e-commerce industry has become dominated by three major players.

Pinduoduo's rise is the result of it avoiding the red ocean and successfully sweeping consumers in the sinking market through highly targeted products, price positioning and social gameplay, and then continuing to expand its customer base.

Before Pinduoduo, Pinduoduo's founder Huang Zheng had launched an app called "Pinhaohuo". At that time, some other social e-commerce companies like U Zhanggui were also using the group buying model. This model was a rather eye-catching innovation at the time. Pinduoduo was actually one of many companies that adopted the group buying model, but its positioning was very clear. It focused on low-priced products and at the same time launched some gameplay that took a lot of time in exchange for relatively small profits.

It caught two special opportunities.

1. One is the rapid rise of mobile devices, and social gameplay basically relies on mobile phones. Around 2014 and 2015, mobile business volume expanded rapidly and surpassed that of PC, and Pinduoduo started at this turning point.
2. The second is that after Taobao went public in the United States in 2014, it faced a lot of challenges. Everyone believed that there were various problems with its products, so Taobao later began to strictly clean up its merchants. It is said that 3 million merchants left Taobao at that time.

A large number of these merchants were taken over by Pinduoduo, and as a result, Pinduoduo now has a large number of merchants that provide products that "may not necessarily be good, but are definitely cheap", thus achieving its positioning and solving the supply problem.

Through such product positioning, coupled with its stimulating gameplay, it accurately targets young and middle-aged people in small towns. Maybe this was not Pinduoduo's original intention. It must have been promoted in big cities and lower county-level cities at the same time, but in big cities at that time, the competition was already very fierce. JD.com and Taobao already have very strong voice and control, but for lower-level county cities, the market is still in a relatively blue ocean state.

At the same time, we will also see consumer groups in small towns, each with their own characteristics. Compared with people in big cities, they have plenty of time, a close social circle, and are more interested in exchanging their time for some relatively small benefits. The methods launched by Pinduoduo, such as sending red envelopes, bargaining, and cash back, actually take a lot of time, and the ultimate benefits may not be great. For groups in big cities, spending so much time participating in these games has limited appeal.

Similarly, Meituan also started in lower-tier cities and then quickly expanded to low-end consumers in big cities. This is because big cities are not populated entirely by high-spending people. There are also people with relatively low spending power, such as students, the elderly, and low-end migrant workers. Their consumption characteristics also have many characteristics of small town youth.

At the same time, Pinduoduo quickly connected with agricultural production areas, opened up the supply chain, and launched low-priced agricultural products directly sourced from the source. This hits the spot for consumers in big cities who prefer green, healthy, fresh, cheap and high-quality agricultural products.

After winning over consumers in lower-tier cities, Pinduoduo began to accelerate its penetration into higher-tier cities.

On the one hand, huge sums of money are invested in advertising at bus stops, CBDs, top variety shows, the Spring Festival Gala, etc.

At the same time, the focus is on subsidizing products preferred by high-end consumers, such as iPhone 11, Dyson vacuum cleaners, hair dryers, etc. Through such products, Pinduoduo has opened a window to high-end consumers and began to continuously penetrate the main consumer groups in big cities.

The next step is my prediction for the future. To become a truly top-notch e-commerce company, Pinduoduo must inevitably win over consumers across the globe and cultivate consumption habits of high-end consumers at the top of the pyramid on the platform, rather than just letting them take advantage of high-end standard products with real subsidies.

I believe that Pinduoduo will actively cooperate with more high-end brands in the future, introduce affordable luxury categories, and strive to enhance service and credibility, becoming a shopping platform where customers can buy high-end products with confidence. Of course, by then, Pinduoduo’s positioning and founding genes will inevitably deviate, and there will be more direct conflicts and competition with JD.com and Tmall, and the outcome is still unknown.

5. Circle Construction

For the last dimension of growth strategy, I use two typical circle apps: Keep and Mint, to illustrate how to build circles and create scenarios, thereby generating high stickiness and obtaining scenario premiums.

Let’s first take an example of logical thinking. Through Luo Pang’s 60-second voice, Luoji Siwei has accumulated a group of content consumers who love learning and are very loyal. It once launched a Luoji Siwei mysterious book package: there were 6 mysterious books claiming to be selected and recommended by Luo Zhenyu himself, priced at 499 yuan. The price of 6 books whose contents we didn’t know were very high, but all 8,000 limited edition book packs were sold out within 90 minutes!

This enthusiasm of consumers comes from their identification with Luo Zhenyu himself, which is the so-called endorsement of trust.

Later, some Taobao merchants also bought some book bags and put them for sale on Taobao, but there were almost no sales. Even after reducing the price to 300 yuan, there were still no transactions. The reason behind this phenomenon is that in the general environment of Taobao, there is no scene of Luoji Siwei, that is, the circle formed by Luo Zhenyu's personal charm recognizes the books he recommends.

This is the scene premium.

Let’s take a look at how Keep and Mint build their circles.

Keep:

First, they start from a common pain point of consumers and construct scenarios and circles, such as dieting, weight loss, and fitness.

One day, after a physical examination or after meeting a blind date, Xiaopang may suddenly have an urge: I want to lose weight, I want to be fit, so Xiaopang starts to enter the scene.

Xiaopang started practicing weight loss. Start by going for a simple run, or buy a gym membership and start exercising.

Later, Xiaopang began to discuss with his friends how they exercised and how to do it more scientifically. Gradually, Xiaopang started to go to forums, study strategies, and began to come into contact with larger fitness groups and more content. So, Xiaopang entered the circle.

Later, Xiaopang wanted to exercise more professionally and heard about Keep, so he downloaded this APP and started to imitate the movements demonstrated on it to exercise every day. Gradually, the circle developed a strong stickiness for Xiaopang.

Later, Xiaopang wanted to understand the key to the movements and ensure their correctness. But he found that if he wanted to listen to detailed explanations on Keep and get more professional guidance, he needed to buy a membership.

Xiaopang resisted the urge to pay at first. Finally one day, Xiaopang found that his waist was sore after doing plank. He was worried about getting injured and urgently needed to understand the key points of the movements. So Xiaopang paid to become a member and unlocked the explanation part of the key points of the movements. At this time, fitness courses became commodities, Keep began to monetize Xiaopang, and Xiaopang really fell into the trap.

Xiaopang often sees some movements on Keep that require corresponding fitness equipment and gear. Although the price and quality of these equipment on Keep are not as good as those of Taobao products of the same price, Xiaopang believes in the professionalism of Keep, so he placed an order on Keep without hesitation and bought more and more equipment and sportswear. In this way, Keep continues to increase the value it obtains from Xiaopang and achieves scenario premium.

As Xiaopang's fitness progressed, the topics he discussed with friends in the Keep forum became more and more professional, and the subculture of the circle had a deeper and deeper impact on Xiaopang. Xiaopang also started contributing content, such as sharing his experiences and achievements, and posting his fitness photos. These contents have attracted more fitness enthusiasts to join the circle.

In such a platform where "people, products, and content" revolve around each other and in the continuous cycle of the social atmosphere, the flywheel effect is constantly manifested. The community on Keep is getting bigger and bigger, and its monetization capabilities are getting stronger. A circle of sports enthusiasts has been successfully built around the fitness scene, forming a strong cohesive force and circle culture, and continuing to bring monetization capabilities and scene premium to Keep.

Mint:

The same is true for mint. Users start with the earliest diets, reducing the amount of food for lunch and dinner, and paying more attention to weight.

Later, users gradually realized that controlling calorie intake was the key, so they began to check the calories of various foods and control calories rather than food intake. At this time, they may see that Mint is very professional in food calorie data and become Mint users.

Later, users began to pay attention to the balance between intake and consumption rather than simply eating less, and dieting became more and more scientific. At this point, users begin to want to understand their basal metabolic rate, as well as important health parameters such as BMI index and fat level. At this time, the health scale that can tell them these parameters came into their sight.

Then, Mint's APP tells users that through the health scale, the APP can obtain the user's basic consumption and then recommend daily food combinations to achieve "balance between income and expenditure."

At this time, one of the cool things about the Mint APP is that it says it can only connect to the Mint health scale. The data from other health scales is not even provided on the input entry APP. In this way, users naturally have no choice but to buy the Mint health scale, unless they do not need Mint's food recommendations, which is exactly the core value and advantage of Mint.

Circle building is a model of creating a special group by entering into a very precise scenario, such as a celebrity fan club, rice fans, or a marathon running group.

They have their own beliefs and values ​​and are loyal users of the platform. Therefore, the value delivered by the platform can be amplified within this group, and the platform can obtain better business opportunities.

Finally, let’s make a brief summary:

Through the strategic review of these 7 classic cases, we can see that we can find the entry point that can achieve seamless connection with the business, build a good product from the inside out first, achieve PMF, and then generate strong stickiness through anchor binding, and then continuously replicate and iterate on the population, and expand geographically, and finally achieve a high scene premium through circle subculture.

These are the five dimensions of a growth strategy to achieve phased growth in users and revenue with clear stages and priorities. The above is what I shared today, thank you everyone.

Author: Xu Xiaopeng, Senior Product Director of Amazon

Source: GrowingIO

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