In-depth review: Pinduoduo’s addictive model!

The author of this article personally experienced the entire process of attracting people to help Pinduoduo , analyzed and sorted it out, and shared how Pinduoduo makes people "can't stop".

• In September 2015, Pinduoduo was officially launched;
• In February 2016, Pinduoduo's monthly transaction volume exceeded 10 million, and the number of paying users exceeded 20 million;
• In July 2016, Pinduoduo's user base exceeded 100 million, and it received $110 million in Series B financing, led by IDG Capital, Tencent, and Gaorong Capital.
• On October 10, 2016, Pinduoduo’s single-day transaction volume exceeded 100 million yuan during its anniversary celebration;
• In October 2017, Pinduoduo occupied the first place in the iOS overall ranking and shopping category for nearly a month;
• On July 26, 2018, as the first domestic Internet company to ring the bell in New York and Shanghai at the same time, it officially landed on the Nasdaq market with an issue price of US$19 and a market value of US$24 billion;
• In July 2019, the list of the top 30 listed Internet companies in the world was released, and Pinduoduo ranked 19th;
• On October 24, 2019, a thunderclap shook the major e-commerce companies that were busy preparing for the Double Eleven shopping festival. Pinduoduo, which was founded four years ago, saw its share price rise by 13% to close at $39.69, with a market value of $46.4 billion, surpassing JD.com, the second largest e-commerce company at the age of 21.

In 4 years, it created a market value of 46.4 billion US dollars, once again refreshing the public's perception of the speed at which the Internet can make people rich.

In the world of Internet, Pinduoduo is considered a master who has learned his way through unconventional means. The famous and upright people have always disdained to dance with the grassroots who rose from the humble beginnings. They prefer to maintain the nobility of the winners being kings and the losers being bandits in their own territory, until the fig leaf is torn off and the bloody facts are laid out before them.

In a situation where there are many e-commerce giants in China, Pinduoduo has torn out a gap for wild growth by relying on its familiarity with human nature and combining it with unique operating rules. And what is behind this wild growth that is providing it with crazy nutrients?

Why is Pinduoduo successful?

I asked a few colleagues around me, and the answers included: seizing the dividend of WeChat traffic, seizing the blue ocean market of consumption downgrade, the support of Tencent, the founder Huang Zheng’s luxurious circle of friends, etc.

It is undeniable that Pinduoduo's success is closely related to the above-mentioned reasons, but what is also indispensable is its unique operating method based on the perfect use of the addiction model to launch its own viral social fission.

According to data provided by Tianfeng Securities Research Institute: In the second quarter of 2019, Alibaba's customer acquisition cost was about 535 yuan per person, a decrease of 0.19% from the previous quarter; JD's customer acquisition cost was about 520 yuan per person, a decrease of 31.40% from the previous quarter; Pinduoduo's customer acquisition cost was about 153 yuan per person, a decrease of 22.34% from the previous quarter;

(Data from Tianfeng Securities Research Institute)

It can be seen that Pinduoduo's average customer acquisition cost is much lower than that of the other two major domestic e-commerce platforms. Behind the data also implies Pinduoduo's familiarity with human nature and perfect use of the addiction model, which are all indispensable key factors in Pinduoduo's rise.

Next, I will review how I became addicted, was hooked by Pinduoduo, and finally became a speck of dust under the wheel of its social fission.

1. What is the addiction model?

First, let’s take a look at what the addiction model is?

The Addiction Model is a model proposed by Nir Eyal and Ryan Hoover in their book Addicted: The Four Product Logics That Make Users Develop Usage Habits, which makes users addicted to products. The model consists of five parts: external triggers, internal triggers, actions, variable rewards, and inputs. The model can be roughly summarized as follows:

Addiction = Trigger + Action + Variable Reward + Commitment

Users use the product through external triggers, and their rewards change during the process of using the product. They invest a lot of money in the process, so that the sunk costs are too high and they cannot extricate themselves. At this time, they use the product again through internal triggers, and the model is finally successfully established.

You think it is natural, but you don’t realize that you are stepping into the addiction formula step by step, and finally forming a habit. Time, attitude and results become the best responses.

2. Trigger

In the triggering stage, which is also the first stage of the addiction model, Pinduoduo's approach can be described as simple, crude and extremely effective; come on, I will give you money, not coupons, but cash.

The specific trigger is mainly divided into two steps: the first step is recommendation by acquaintances, and the second step is releasing direct interest bait

It can be seen that in the first step of acquaintance recommendation, Pinduoduo mainly relies on the WeChat ecosystem that focuses on acquaintance social networking. Since the model has been hooked and addicted, the variable rewards and large amount of cost investment drive this acquaintance to invite you to help him. Most people will not choose to refuse due to face, because it is just clicking on a link anyway.

What if you haven't downloaded Pinduoduo? Congratulations, because the degree of assistance provided by Pinduoduo is very different between new and old users, in order to get greater assistance, your friend will definitely use his eloquence to persuade you to download a Pinduoduo APP. Here you will find another magical place - the installation package of Pinduoduo is really small.

When you click the link and install Pinduoduo to help your friends successfully, the second step trigger appears again:

That’s right, it’s just releasing cash bait directly, isn’t it exciting? Surprise? You are only 4 yuan short of the 100 yuan you need to take it home. It’s better to take action than to just think. When you see the cash expiration time below, you should quickly ask your friends for help!

III. Action

In fact, when we download and install the APP, we have already connected from the trigger stage to the action stage. Everyone has a motive for doing anything, just like the police will start with the motive as a breakthrough when solving a case.

Behavior has three elements:

• Element 1: Motivation
• Factor 2: Capacity
• Element 3: Trigger

During the triggering process, the recommendation from acquaintances has already given you the motivation to click on the link and download the app. The simple steps and smaller installation package will undoubtedly lower the user's threshold for assistance and make access easy.

Then you start looking for your own help partner:

It has to be said that Pinduoduo’s advertising copy is also unique.

4. Various rewards

The figure of 100 RMB attracted me deeply before, but it was not enough, far from enough.

The ability element in the behavior will make people instinctively think about ROI (return on investment), that is, think about how many people's help I need to get the 100 yuan.

So, with a doubtful attitude, I asked people for help, and the magic happened again: no matter who the user you asked for help was, you would be one step closer to withdrawing 100 yuan. “Wow, xxx helped you get 0.31 yuan.” “Wow, xxx helped you get 0.01 yuan.”

At this point you will find that it is not easy to take home 100 yuan, because no matter how many people you invite to help you, as long as the supporting user is an old user, he can only add a few cents to your support money;

That is to say, if there are no new users among the users you invite, then if you want to take home 100 yuan from the initial 96.82 yuan red envelope, you need to invite 318 friends to help you. On the contrary, if the user you invite is a new user, the amount he adds to your support fund will range from 0.3 to a few yuan.

This is how Pinduoduo tells you that if you want to get the 100 yuan, then hurry up and attract new users to register for me!

Obviously, the red envelopes from Pinxixi are the most direct monetary incentive, while the support from acquaintances is the "infinitely variable incentive." Infinite means there are many categories of changes, and variable means that the amount of support is really changing. After a few helps, the 100 yuan withdrawal is just around the corner. Maybe, next time when it’s full, I can withdraw 100 yuan?

At the same time, we can also think about another question: what stimulates our excitement points and makes us continue to secrete dopamine? When we receive an award, do we experience emotional ups and downs during the award-winning process or do we feel extremely emotional the moment we step onto the podium? Scientific data shows that when people expect rewards, the secretion of dopamine in the brain will increase sharply. The greater the variable, the richer the neurotransmitter.

5. Investment

At this point, it is already the final stage of the addiction model. Let me borrow a picture that makes people desperate.

After a brief analysis, there are three important pieces of information in the figure: existing contribution, time and contribution per person. When the deadline for inviting people to help came to the end, I still hadn't given up on asking people to help, always hoping that I could still save myself - even if the old users who helped now only paid one cent, what if I could get a new user?

Why? Thinking back on it, I also want to ask myself why, as if I had lost my mind and was obsessed with the question "what if". After careful consideration, I feel that it is reasonable. At this stage, I believe that few people can calmly choose to give up. The experiences in between have made them invest a lot of costs, so that the sunk costs are too high and they cannot extricate themselves.

Finally, let’s summarize the cost you paid to get this 100 yuan.

• Personal connections: I have consumed a lot of personal connections, but have not received any output;
• Time: Almost the entire afternoon was spent on it;
• Money: The major groups sent out red envelopes totaling about 30 yuan;
• Amount of support received: Did not meet the required amount.

In economics, there is a concept of "sunk cost", which means that when people decide whether to do something, they not only look at whether it is good for them, but also whether they have invested in it in the past. We call these irrecoverable expenses, such as time, money, and energy, "sunk costs."

Similarly, in the process of supporting Pinxixi, after we have invested material and non-material costs such as connections, time, and money in order to obtain support funds, even if we can only get "1 cent" each time we invite people to help, we will still be happy to do it, because there is bait in front of us and we are obsessed with it.

Finally, the addiction model was finally constructed, and social fission officially began, spreading like a virus to one circle of friends ecosystem after another.

Author: Edison YZY

Source: Edison YZY