Analysis of Pinduoduo Business Model

Under Taobao and JD.COM, two e-commerce platform giants, why can Pinduoduo stand out?

As a synonym for inferior, cheap and fake goods, how can Pinduoduo raise 3 billion US dollars, the company's valuation is 65.438+0.5 billion US dollars, the monthly running water is 40 billion US dollars and the users are 300 million US dollars?

First, we learn the business model of many products together; Before analyzing Pinduoduo's business model, let's take a look at what a business model is. How to design a business model?

1. What is a business model?

? Business model can also be said to be an organization's profit model, a way for an organization to maintain self-sufficiency in property; The way of enterprise survival;

Automatic hematopoietic function = profitable viability

Profitability: income (income) > expenditure (reward)

2. How to design a business model?

Business models are formed through continuous exploration, especially innovative business models.

The following figure can better illustrate the process of commercial closed-loop design:

The above picture can fully embody a business model, which needs us to explore, verify and optimize constantly.

? So how do we design a business model? Let's take a look at these diagrams of Starting Point College, including scheme closed loop, value closed loop, resource closed loop and attribute closed loop:

Second, according to the above business model design methodology, let's take a look at how Pinduoduo designed it:

1), target groups and their needs:

? A) User groups such as Line 2, Line 3, Line 4 and Line 5 use smart phones, and there is a demand for purchasing good quality and cheap goods; This kind of users have low requirements for quality; Just use it;

B) Because Taobao has improved the qualification of merchants to settle in, and the operating cost has increased, many merchants without brands and word-of-mouth are unable or difficult to settle in large e-commerce platforms such as Taobao; Pinduoduo lowered the entry threshold;

2) product design

A) The purchase process of users is reduced, and the link of joining the shopping cart is removed;

B) Update and retention can be realized more quickly by spelling; Generally, the e-commerce platform can buy goods by itself, but Pinduoduo has set up two purchase methods: purchasing separately and initiating a spell order; Most people will choose to launch a spell list because it will be cheaper; When a user initiates an order, it can use the traffic of WeChat to quickly pull new products, and at the same time, it can also arouse the purchase of old users and realize the traffic of users;

3), low price to attract users

Pinduoduo's compression of circulation channels is reflected in two aspects:

Reduce your gross profit: only charge 0.5% handling fee to reduce the platform channel fee.

Reduce the gross profit of merchants: the low-cost competitive environment forces merchants to operate at a low profit.

4), category selection

Brand-driven: Brand is the dominant factor in users' purchase decision.

Function-driven: User's demand for function replaces brand as the dominant decision-making factor.

? Pinduoduo's main sales categories, we will find that fresh food, household daily use, clothing are function-driven commodity categories. We consumers don't care about the brand of a bundle of clothes hangers. What he cares about is the seemingly identical products: storefront 15 RMB, Taobao 9.9 RMB and Pinduoduo 6.9 RMB.

This is the power of function-driven category+low-priced package, and our consumption decision is actually not that complicated.

5) Fake and shoddy goods

Pinduoduo adopts the advanced-to-remedy scheme to improve customer satisfaction and ensure the long-term survival of the platform by solving quality problems. It has been rumored that Pinduoduo will be fully transformed on 20 18, seeking brand cooperation and getting rid of the current market image of selling fake goods and inferior products; The attempt of private brand should also be within the planning of Pinduoduo.

6), supply chain investment

Scarcity of resources-from the perspective of scarcity of resources, high-quality production plants are the scarcest resources in the future competition of private brands. Pinduoduo can help domestic high-quality processing enterprises get rid of the predicament of foreign trade export and quickly open domestic sales channels through cash+channel investment. This is a win-win result.

Pinduoduo's main competitor in the future is more likely to be Netease YEATION. Mastering the upstream enterprises is equivalent to strangling the competitors.

The shortcoming of operation-own brand is more controllable, but we ignore a very important issue: Pinduoduo is not a self-operated e-commerce platform, and the whole supply chain has rich experience.

Faced with millions of single product orders, it is a great challenge whether Pinduoduo has the ability to control the quality of goods and services. Therefore, through investment, Pinduoduo shares the growth dividend with the factory, and at the same time hands over the warehousing and logistics links to its partners, which is more conducive to Pinduoduo focusing on the challenges of its competitors.

postscript

Learn from the views of many predecessors and some of your own nonsense!