Competitive product analysis: Pinduoduo and Taobao's money-saving monthly cards

I am a heavy user of Taobao. Since I bought a money-saving card from Pinduoduo , I have gradually developed a habit of going to Pinduoduo to check out my shopping. I first came into contact with money-saving cards on Taobao. Later, I not only bought Taobao money-saving cards, but also Pinduoduo money-saving cards. This led to me that every time I went shopping on major platforms, I would check to see if there were monthly money-saving cards so that I could buy one for a month to try.

The way to use the money-saving card is the same as that of a paid membership, so the basic logic is similar to that of a paid membership, except that there is no concept of levels. The benefits are basically coupons for daily shopping exemptions or deductions. Each platform will work hard to control the rules for the use of benefits in order to achieve the goal of repeat purchases and cultivate user loyalty.

In fact, Taobao’s money-saving card is still in the internal testing and adjustment stage. Many users cannot see the entrance to the money-saving card. Even if they are invited by an already activated user, they may be rejected, or even their early renewal may be refused. Fortunately, both of my family accounts are within the scope of the official gray test. It is also a great honor to witness how such a large-scale platform carefully issues and implements an operating method.

Types of money saving cards and corresponding benefits

Let’s take a look at a summary first

Pinduoduo has two kinds of monthly cards, one is a trial monthly card, and the other is a regular paid monthly card. The fees are different and the gameplay is slightly different, targeting players of two different payment levels.

The trial monthly card not only allows you to experience it for free for one month, but you can also renew it for 1 yuan per month, and continued use will be 7.8 every three months. The regular paid monthly card costs 5.9 per month for the first activation and 38.7 every three months for renewal.

The biggest difference in the benefits of the two monthly cards is the 5-yuan no-threshold coupon. For a regular monthly card, you can directly receive 4 5-yuan no-threshold coupons, while for a trial monthly card, you need to complete tasks to receive them.

Compared with Pinduoduo's rich routines, Taobao's monthly card types and gameplay seem so plain, easy to understand and simple, but at the same time they also make users feel that the rights and interests are too few.

When Taobao Special Edition competes face to face with Pinduoduo, the differentiation of monthly card benefits becomes very direct, that is, low threshold, easy access, and one more card.

Differences in equity details

1. Core coupon package benefits

Let’s first look at the detailed comparison of the core coupon package benefits.

It is not difficult to see from the details that Taobao's 1-5 yuan coupon is basically designed with a 10% discount as the benchmark. The threshold is lower than that of Pinduoduo. At the same time, there are more levels of discount, ranging from 1 yuan to 12 yuan to meet your various unit prices. You can use a coupon if you collect a little bit.

However, Taobao has also increased the difficulty of coupon usage rules. The platform divides the coupons into two batches. The first batch can only be used after n coupons have been used. When using, you may encounter a situation where you cannot use the optimal discount, and there is no prior notice when activating the coupon.

Taking the 91-yuan coupon package as an example, if you spend more than 110 yuan today, you can use a 110-8 discount coupon. The next day, you spend more than 110 yuan again. At this time, if you have not used up all 5 coupons in the first batch, you cannot use the second 110-8 coupon and can only use the lower-level 80-7 coupon.

Pinduoduo's discount thresholds are not high. According to outdated public data, in August 2019, Pinduoduo's annual average user order value had reached 50 yuan. Judging from the current data, with steady growth, the thresholds of 70, 90, and 110 will not be difficult for Pinduoduo's users to reach. For users of the trial monthly card, buying a trial monthly card is equivalent to buying admission qualifications with a 5-yuan no-threshold coupon, but whether you can actually get the 5-yuan no-threshold coupon still depends on a lot of effort. You need to have enough time and a lot of shopping needs to get it through treasure hunting.

The most regrettable thing for me during the use process is that most of the time Pinduoduo’s money-saving card cannot be used in conjunction with the 10 billion yuan subsidy, which shows how powerful the 10 billion yuan subsidy is.

After a detailed comparison of the coupon benefits of the Taobao platform and Pinduoduo, we can find that the product design ideas of the two are obviously different. Although both can accumulate stickiness, tap high-value users, and promote conversions in key links, in the details, Taobao considers user value from the user's perspective more than Pinduoduo, and truly provides users with usable and easy-to-use products.

At the same time, this also shows that there are still significant differences in user usage habits between the products of the two major systems, which directly leads to differences in operating strategies. According to public data, by the end of 2020, the average annual consumption of Alibaba consumers had reached 9,034 yuan, while Pinduoduo's was only 2,115 yuan during the same period. In addition, the Taobao system has nearly 200 million highly sticky, high-quality core users, which can attract high-quality brand merchants to settle in. A good and complete user service system is also the basis for high unit prices and high-stickiness users, which can bring a positive cycle to the Taobao system. Therefore, Taobao’s current operational strategy is more inclined towards maintaining loyal users.

2. Other rights and interests

The benefits of Pinduoduo's monthly card area are dazzling, so I will not explain and introduce them one by one. Although I have developed the habit of shopping in Pinduoduo, I have only enjoyed the privileges other than the general coupon package once. After many analyses and observations, I found that if you really want to enjoy these benefits, you need to search for the products you want to buy before each shopping. You can collect them or place a fake order and then cancel them. Then go to the designated areas of so many benefits. According to Pinduoduo's recommendation strategy, the product you like may be in a certain area. Then, while receiving the discount order for this area, you can also accumulate area privileges and proceed to the next shopping after getting rewards.

It has to be said that if you want to get more discounts when shopping on Pinduoduo, you will need to spend more time and your shopping efficiency will be lower. But once you are familiar with Pinduoduo's operating routines, you can indeed save a lot of money. However, I have not yet triggered Pinduoduo's anti-pickup strategy, and I don't know what measures it will take against users who often buy at various discounted prices.

3. Experience Difference

Pinduoduo has really put a lot of effort into tempting new monthly card users. Whether it is from the logical rules or the game guidance, it can make users think they have picked up a great bargain and act quickly. For example, if you buy a regular monthly card for 5.9 yuan in the first month, Pinduoduo will not directly tell you that this is a discount given to us (how worthless it is to give it for free). Instead, it will tell you that this is an opportunity you have won through a lottery, as others are only 29.9! This set of techniques was also copied verbatim by Taobao's special price version. Of course, since it works, there's no need to reinvent the wheel.

4. Coupon types and reverse order processing differences

In fact, there are two types of coupons in the special edition coupon packages of Pinduoduo and Taobao. One is a 5 yuan no-threshold coupon, which can be used as a deduction even if the purchase is less than 5 yuan. The other type is a discount coupon, which can only be used if a certain amount is reached. Taobao has coupons for discounts on purchases above a certain amount, and a 5 yuan coupon can only be used if the purchase amount is above 5.01 yuan.

Because Pinduoduo is a group-buying shopping platform, group buying is based on single products, and there is no shopping cart module in the front-end interactive processing. Therefore, when the user places an order, the order is directly split and processed according to the product dimension, which is quite different from the order processing of the Taobao platform. The difference in reverse processing of coupons is basically the logical difference of the transaction section, which should have little to do with the money-saving monthly card itself. However, Pinduoduo's handling of orders for combined payment with coupons and after-sales service also reflects the problem mentioned earlier: when it comes to handling user experience, Pinduoduo is better at playing with users rather than serving them. It also shows that Alibaba’s underlying complex business support capabilities are very strong and its technical scalability is very strong.

The logic of this order processing is:

When I pay for two products together and use a no-threshold coupon, if after-sales service is required, Pinduoduo and Taobao will split the coupon into two. When all orders paid for together are completed and the coupon is returned to the user's account, Pinduoduo will return two split coupons, while Taobao will still return one complete coupon (at least at the user level).

For example, when I combined the payment of two items, I used a 5-yuan no-threshold coupon. One item was apportioned to 2.51 yuan, and the other was apportioned to 2.49 yuan. After the two items were sold out one after another, Pinduoduo returned me two no-threshold coupons, which were 2.51 and 2.49 respectively. At this time, I cannot get a 5-yuan discount when buying one item, because two monthly coupons cannot be used for one item at the same time. The way Taobao and Taobao Special Edition handle it is that when all orders are successfully refunded, a complete 5-yuan coupon will still be returned, which is in line with the user's initial psychological cognition.

When I pay for two items together and use a discount coupon, if one of the orders has after-sales service but the other is not returned, Pinduoduo will not refund the remaining portion of the half-used coupon to me. Both orders must be returned before a complete discount coupon will be issued. Taobao will return the coupon to me in half until I finish both orders, and then return a full coupon.

Let's use the same example again. For example, when I combined the payment of two items, I used a coupon of RMB 60-5 for purchases over RMB 60. One item was allocated to RMB 2.51, and the other was allocated to RMB 2.49. I applied for a refund for the order with the RMB 2.51 allocation. Pinduoduo will not refund me half of the coupon, but Taobao and Taobao Special Edition will first refund a split coupon, such as RMB 2.51. This coupon can be used directly based on the original discount, such as RMB 60-2.51.

Beyond the Money Savings Card

It is meaningless to analyze an operational function without considering the overall background and positioning of the platform. Pinduoduo's money-saving card was launched during the fastest growth stage of the Pinduoduo platform. Currently, the monthly active users of this product have exceeded those of Alibaba.

Pinduoduo now regards itself as a traffic pool, not just an e-commerce mall. The impression he gives to users is that there is always an event going on, and that you can enjoy discounts anytime and anywhere. This gradually cultivates users' shopping habits and dependence on the Pinduoduo platform.

When user positioning and product positioning are basically the same, different brands compete on resources and speed. Merchants, users and supply chains are all resources for the platform. Pinduoduo will seize every opportunity when a user opens the APP and try to convert users by various means. Over time, users will form a habit of shopping on Pinduoduo.

As for Taobao, it only needs to defend its own moat and maintain user stability, so Taobao still maintains the perception of high-quality experience and brand awareness, and users can feel that shopping on my platform is efficient, and you don’t need to work hard to find ways to put together an order to use a discount coupon, so the platform has more gradients of full discounts. However, the platform only improves efficiency on the demand side. For merchants on the supply side, how to improve operational efficiency and make business less difficult is also an issue that needs to be considered. After all, the balance between supply and demand is very important.

I have a friend who opened several stores on Taobao and Pinduoduo and other platforms. He reported that Pinduoduo’s store was easier to operate and grew quickly, so he focused on Pinduoduo later.

It seems that the special version of Taobao is slightly inferior in the money-saving monthly card sector. On the one hand, the price of the money-saving monthly card is higher than that of its competitors. On the other hand, the entire operating system has no motivation for continuous return of traffic, nor does it have the means to keep the traffic for a long time. It simply lowers the threshold for coupons, and users still leave after spending. It is equivalent to telling its users, "I also have the low prices you want, so don't leave me and go to Pinduoduo." However, it is very difficult to get a free order by placing 15 orders, which is not attractive enough.

However, after the 18.2 billion incident, Alibaba products can also be connected to the Tencent ecosystem. It should be able to take the opportunity to expand user traffic resources and fight Pinduoduo again. However, compared with the original WeChat ecosystem, the current WeChat ecosystem is more difficult to operate and has more competitors.