We all know about the success stories about Chinese tech giants like Alibaba and Tencent, but there is one more company that’s been making news lately and surprising the world with its rapid growth. Pinduoduo is not just another ecommerce app, where you can just browse, buy, leave and forget. Shopping with the Pinduoduo app makes you feel like shopping with your friends or family, and have fun while doing it. Often referred to as a Facebook-Groupon mashup, this sensational app has gained around 300 million users since its release in 2015. So how did it happen? Let’s find out.
What is it and how it started:
Founded by ex-Google engineer Colin Huang Zheng, in January 2015, Pinduoduo is a social ecommerce site which offers super cheap deals, and very attractive referral discounts to its users. Often used through Wechat, all users are able to buy merchandise at 20% lesser prices than the other platforms as they are directly dealing with manufacturers. Along with that, the referral discount campaigns push customers to share the app with their friends which explain the viral nature of the app.
Their Target Market:
When it comes to Pinduoduo’s objectives, it is mostly surrounded by acquiring new customers through their app download, retaining and repeating. With their brilliance in building viral marketing tactics, Pinduoduo surely seems to know all the tricks to make their customers do the marketing for them. They primarily target low income customers from lower tier cities and towns. This provides them with a competitive advantage over Alibaba and Tencent who compete only for wealthy customers. Pinduodou’s customers are very price sensitive and like to purchase more often and are usually in control of purchasing on behalf of the whole family. Reports suggest that majority of the apps users are females with the age above 40 years living in old Chinese cities.
When it comes to Pinduoduo’s objectives, it is mostly surrounded by acquiring new customers through their app download, retaining and repeating. With their brilliance in building viral marketing tactics, Pinduoduo surely seems to know all the tricks to make their customers do the marketing for them. They primarily target low income customers from lower tier cities and towns. This provides them with a competitive advantage over Alibaba and Tencent who compete only for wealthy customers. Pinduodou’s customers are very price sensitive and like to purchase more often and are usually in control of purchasing on behalf of the whole family. Reports suggest that majority of the apps users are females with the age above 40 years living in old Chinese cities.
Unique Features of the fastest growing app in China:
So what makes this app stand out? According to a report published by Cheetah Mobile in 2015, Pinduoduo was ranked second among all the e-commerce sites in China with Taobao ranking as the first. This suggests that the company must be doing something extraordinary to be growing so rapidly. The app applies some brilliant marketing strategies when it comes to acquiring, retaining customers and making sure that they will keep coming back. Some of their tactics include,
So what makes this app stand out? According to a report published by Cheetah Mobile in 2015, Pinduoduo was ranked second among all the e-commerce sites in China with Taobao ranking as the first. This suggests that the company must be doing something extraordinary to be growing so rapidly. The app applies some brilliant marketing strategies when it comes to acquiring, retaining customers and making sure that they will keep coming back. Some of their tactics include,
Group Buying:
This is one of the main attractions of the app where it offers special discounts when current customers share the app with friends and family, make them download it and purchase as a group. All the members of the group get the products delivered to their respective addresses but at a discounted price.
This is one of the main attractions of the app where it offers special discounts when current customers share the app with friends and family, make them download it and purchase as a group. All the members of the group get the products delivered to their respective addresses but at a discounted price.
Free products:
Who doesn’t love some freebies? Even if it’s a toothbrush. Pinduoduo offers a wide range of free products to their customers but there is a catch of course. Current customers just have to make new users sign up for the app through Wechat and download it. The rewards get better with the number of signups referred by the customer and that makes it more addictive and interesting. For example 1 install will win you a box of candy while 9 installs will win you 1.3 kilograms of nuts and so on. Awesome tactic to get your business viral .
Who doesn’t love some freebies? Even if it’s a toothbrush. Pinduoduo offers a wide range of free products to their customers but there is a catch of course. Current customers just have to make new users sign up for the app through Wechat and download it. The rewards get better with the number of signups referred by the customer and that makes it more addictive and interesting. For example 1 install will win you a box of candy while 9 installs will win you 1.3 kilograms of nuts and so on. Awesome tactic to get your business viral .
Short term coupons: As their name suggests these sale coupons which are valid for very short time. By very we mean as short as a coupon with only 2 hrs of validity.
Asking friends to “bargain”:
Another way Pinduoduo makes itself viral is by allowing friends or family members of users to help them bargain about the products they wish to purchase. Each time someone helps you bargain, the price decreases a little. A lot of times people end up getting the products for free. This might sound little vague in terms of business modeling and cost effectiveness but Pinduoduo mainly focuses on long term profit than short them while investing in these campaigns.
Another way Pinduoduo makes itself viral is by allowing friends or family members of users to help them bargain about the products they wish to purchase. Each time someone helps you bargain, the price decreases a little. A lot of times people end up getting the products for free. This might sound little vague in terms of business modeling and cost effectiveness but Pinduoduo mainly focuses on long term profit than short them while investing in these campaigns.
Red envelopes and leaderboards:
These are straight up cash rewards that you get for inviting friends to install the Pinduoduo app. The rewards are mostly between 5-20 RMB and also the highest amount receivers get their name displayed on the apps leaderboard feature.
These are straight up cash rewards that you get for inviting friends to install the Pinduoduo app. The rewards are mostly between 5-20 RMB and also the highest amount receivers get their name displayed on the apps leaderboard feature.
Lotteries:
For a refundable fee of 0.01 RMB, users can win a lottery of buying a product for 0.01 RMB. They need to invite as many friends as possible in order to raise their chances on winning.
For a refundable fee of 0.01 RMB, users can win a lottery of buying a product for 0.01 RMB. They need to invite as many friends as possible in order to raise their chances on winning.
As of 2017, the company was said to have a gross merchandise volume that exceeded RMB 100 million which is very impressive as it had taken way too longer for other tech giants to reach the same milestone. The company recently came into news for its involvement in investing RMB 10 billion ($1.58 billion ) to help with the marketing and promotion of agricultural products from 500 manufacturing origins within 2018. The company is planning to use these funds in order to help with the branding of these products.
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