An inventory of the most comprehensive marketing methods of the 200 billion Pinduoduo

On the evening of July 26, Pinduoduo, which had been established for less than three years, officially landed on the Nasdaq market.

As the opening price was announced, the net worth of founder and CEO Huang Zheng reached US$13.7 billion, surpassing his e-commerce peer Liu Qiangdong : It has been 14 years since JD.com was founded, and Pinduoduo is not even three years old.

As of 10 a.m. on the 27th, Pinduoduo's market value rose to US$33.7 billion (more than 200 billion yuan), a 40% increase, which shows that the market is optimistic about Pinduoduo.

In September 2015, an app called Pinduoduo was launched, entering the seemingly already saturated e-commerce "red ocean".

Pinduoduo adopted the strategy of "surrounding the cities from the countryside" and quickly seized the markets in third- and fourth-tier cities and rural areas. In just one year, Pinduoduo has caught up with Vipshop in terms of the number of orders and users.

Few people could have foreseen that Pinduoduo could survive and quickly surpass giants such as Taobao , JD.com, and Suning . If we take 100 billion yuan in GMV (website transaction amount) as a milestone, it took JD.com 10 years to complete it, Taobao took 5 years, and Pinduoduo only 2 years and 3 months. This is the speed at which Pinduoduo expands like wildfire.

However, there are many controversies surrounding Pinduoduo, such as low prices, poor quality, and the criticized viral marketing model. However, Pinduoduo’s marketing model can be said to have played an indispensable role in its current success.

The law of misaligned competition

According to founder Huang Zheng, Pinduoduo is engaging in misaligned competition, competing for users in different scenarios, and misalignment will allow it to grow faster.

In the era of mobile Internet , user usage habits have become fragmented, which naturally increases many consumption scenarios. This is completely different from Taobao's active search model. Pinduoduo emphasizes sharing among acquaintances to stimulate users' desire to shop. In the long run, user needs will be divided into different scenarios.

The survey found that there are three typical groups of people on Pinduoduo:

1. People who have never had online shopping experience;

2. People who know about Taobao and have shopped on Taobao but have not formed a buying habit;

3. People who cannot be satisfied by Taobao.

At present, everyone is talking about consumption upgrading, thinking that there are more and more middle-class people and their requirements for quality are getting higher and higher. Therefore, e-commerce giants such as Tmall and JD.com are trying to get rid of their low-price image and build quality consumption platforms.

However, the reality is that the number of China's new middle class is still too small. 55% of China's Internet users are distributed in third-tier and lower-tier cities. Most of them are low-income people and are price-sensitive customers. It was this group of people in third-, fourth- and fifth-tier cities who were "looked down upon" by Taobao and JD.com and who just wanted something useful that gave Pinduoduo the opportunity.

According to Aurora Big Data , as of February 2018, Pinduoduo's penetration rate in third- and fourth-tier cities (21.38% and 35.34% respectively) even exceeded that of Taobao Mobile (20.31% and 31.50%). Pinduoduo’s growth is the inevitable result of the third wave of demographic dividend of mobile Internet . The third wave of people mainly comes from the population of third-, fourth- and fifth-tier cities, with a number of as many as 500 million to 600 million.

Currently, Pinduoduo's number of active users has reached 344 million, exceeding the total population of the United States (327 million), and its market share is about 5.2%, far ahead of its followers.

Pinduoduo's method of staggered competition is actually to differentiate its positioning in terms of products, markets, consumers, prices, etc., and finally it carved out a path in the e-commerce industry, which has long been a red ocean.

Viral social marketing model

Pinduoduo’s most successful marketing method is undoubtedly the viral social marketing of group buying and price-cutting, which is also the simplest and most effective way to attract new customers .

After making payment, the group leader can share the purchase on social platforms such as WeChat with just one click. From placing an order to payment, and then to leaving the group buying page, each stage is hinting and guiding the buyer to share... After completing the group buying, the group leader has the opportunity to get a free coupon, which can be regarded as another disguised encouragement for sharing.

This kind of group buying and bargaining is actually the concept of wholesale and micro-distribution. With the help of Tencent QQ and WeChat traffic , there is a sharing platform (social circle spread); it is shared among friends and relatives, so there is credit endorsement (inducing users to produce fission effect consumption); our living conditions are similar, you need paper and I need it too, and it is so cheap, the demand for group buying is the same, and the success rate of group buying is also greatly improved (further expanding the influence). In the early stages, you can attract a large number of users without almost any advertising!

As a result, various Pinduoduo bargaining mutual assistance groups were born , forming a complete ecosystem. This seemingly simple sharing, group buying and bargaining model is precisely the key to Pinduoduo's rise!

In 2017, Pinduoduo's customer acquisition cost was only 11 yuan per person, far lower than JD.com and Alibaba 's customer acquisition cost of more than 200 yuan per person. This was also the year in which Pinduoduo achieved its fastest growth.

Of course, it has to be said that Tencent has provided a lot of help to Pinduoduo, both in terms of money and traffic. In February this year, Tencent also signed a five-year strategic agreement with Pinduoduo: not only will it open the WeChat wallet access to it, but it will also cooperate in payment, cloud services and user interaction.

Nowadays, Pinduoduo has mastered these operations to perfection. When you open the Pinduoduo APP, you will be dazzled by the various promotional activities. Free, red envelopes, treasure chests, and lucky draws, these common design ideas in games are used to perfection. To get these benefits, you just need to move your fingers and forward the link to a few WeChat groups .

As traffic becomes increasingly expensive, Pinduoduo uses this viral social mechanic to acquire customers at low prices, thus becoming a latecomer and surpassing the competition.

Place brainwashing song ads

From June 2017 to June 2018, the number of WeChat active users increased from 870 million to 930 million, and the growth has slowed down seriously. The number of monthly active users of Pinduoduo APP also increased from more than 44 million to 167 million, a surge of 282.9%. Currently, Pinduoduo’s WeChat mini program has 42 million monthly active users, which is about a quarter of the APP.

As WeChat’s growth has stagnated, Pinduoduo will naturally hit its ceiling. Therefore, Pinduoduo did not rely entirely on WeChat, but started advertising very early.

In October 2016, Pinduoduo began to invest in offline subway and bus stop advertising in Guangzhou. This was Pinduoduo's first stop in outdoor advertising, and advertising was subsequently launched in major cities across the country.

In addition, television advertisements also followed suit, on CCTV and provincial satellite TV stations. Pinduoduo adapted the divine song "I Miss You So Much". Anyone who has heard it once will have the feeling of "magic music lingering in the ears", although it cannot be sung by everyone like a pop song. But sometimes, I always hum it inadvertently. This reminds people of the brainwashing hit song Melodrama. The difference is that Pinduoduo has taken advantage of the entertainment nature of music to take the adaptation of advertising music to a new level.

Crazy entertainment marketing

It has to be said that Pinduoduo is now stepping up its investment efforts, especially in entertainment marketing, and is willing to spend money.

In the first quarter of this year, in just three months, Pinduoduo's marketing expenses burned through 1.217 billion yuan, while it only spent 1.345 billion yuan in the whole of last year. The investment of real money has made Pinduoduo the most vocal advertiser in China.

In terms of entertainment marketing, Pinduoduo sponsored two programs on Hunan Satellite TV this year, "Chinese Restaurant" and "My Boy".

Last year, Pinduoduo "dominated" multiple entertainment variety shows across several popular satellite TV stations, including " Happy Camp ", "The Voice of China", "Extreme Challenge" and the sixth season of "Running Man". Calculated according to the prices available for query by satellite TV stations, such as the exclusive sponsorship fee for the third season of Happy Comedian was 250 million yuan, it can also be seen that Pinduoduo has spent several hundred million yuan on entertainment marketing. It has to be said that Pinduoduo spared no effort in investing in ace variety shows, and its crazy marketing played a certain role, allowing "Pinduoduo" to enter the public eye with an unstoppable attitude.

Charity Event Marketing

On February 6, 2017, at the 2017 "China Time" annual economic news review and awards ceremony jointly organized by China Economic Net and the Center for Forecasting Science Research of the Chinese Academy of Sciences, Pinduoduo won the "Poverty Alleviation Excellence Award" for its achievements in helping farmers get out of poverty.

Since 2017, Pinduoduo has been helping fruit farmers sell unsaleable fruits and achieve targeted poverty alleviation. Pinduoduo's efforts and achievements in supporting agriculture and alleviating poverty are obvious, and naturally its own reputation has also been greatly improved.

It should be said that this is also a public welfare marketing event that Pinduoduo is doing. Through this method, it can accumulate a certain reputation among the target groups in third-, fourth- and fifth-tier cities, thereby driving brand communication.

Summarize:

Pinduoduo’s rapid rise in a short period of time and its successful listing can be said to be the result of the right time, place and people. Although its innovative marketing model is controversial, it is very useful for the precise users it needs.

Today, Pinduoduo is also trying hard to get rid of its image of low prices and poor quality. After all, the proliferation of counterfeit goods will not only be regulated by relevant departments, but will also be abandoned by consumers. Pinduoduo still has a lot of work to do to become a truly high-quality online shopping platform.

Source: Marketing Officer (ID: cmo866 )