As soon as 618 ended, Pinduoduo began to make big promotions again

E-commerce newspaper Pro

2024-06-28 10:01E-commerce newspaper official account

Pinduoduo opens a summer vacation promotion to attract investment

Not long after 618 ended, Pinduoduo, which couldn't stay idle, began to make big promotions again.

Recently, Pinduoduo launched a summer vacation promotion to attract investment. Like the previous promotions, merchants will receive a large weighting of search and recommendation rankings after successful registration, as well as tens of billions of exposure traffic in multiple locations, and the official promotion logo will also be displayed in the product title, and event banners will be added to the product detail page.

It is worth noting that when the promotion price of the product submitted by the merchant is higher than the lowest price of the same item inside and outside the site, the event banner of the promotion logo and product details before the product title will be temporarily hidden. In other words, price power is more important in this promotion, and it is easier for consumers to filter out low-priced products.

Some people may ask, is it really necessary to have a big promotion just after 618?

For other platforms, it may not be necessary, but for Pinduoduo, it is very necessary.

On the one hand, 618 is not Pinduoduo's "home field", rather than in 618 and Jingdong, Tmall hard-to-face, it is better to avoid its edge and find another way. In other words, 618 Pinduoduo mainly took a defensive position, and the real offensive only began after 618.

On the other hand, the timing of 618 did not take care of all the population. For example, graduates who have just finished the college entrance examination have a strong desire to consume and spending power, and as the dust settles on scores and volunteers, their needs to buy computers and change mobile phones have also surfaced, and Pinduoduo's summer vacation promotion has undertaken this part of the demand.

More importantly, in order to consolidate the low-price mentality, Pinduoduo is committed to the "normalization" of big promotions, and can't wait to have activities every day. Taking stock of Pinduoduo's big promotions in a year, you will find that its arrangement is very full, and almost every month it involves:

January: New Year's Day

February: Spring Festival does not close

March: March 8th Festival Promotion

April: New summer promotion

May: May Day Promotion; Five-Five Shopping Festival

June: 618 Promotion

July and August: Summer Vacation Sale

September: Mid-Autumn Festival Promotion

October: National Day Promotion; Double Ten Promotion

November, December: 11.11; Double 12

JD.com and Tmall have established a solid user mentality in 618 and Double 11 by virtue of their early entry into the game, which is difficult to compare with Pinduoduo in the short term compared to traffic. However, if the battle line is lengthened, it can maximize the advantages of Pinduoduo's market activity and dilute the attractiveness of 618 and Double 11 to users.

In a word, if the daily price of a platform can be the same as that of other platforms when it is on sale, then it is obvious who the consumer will choose.

Behind the big promotion is the strength of low prices

Behind the continuous promotions is Pinduoduo's consistent low-price strategy. However, low prices are not simply achievable, and there are many benefits and trade-offs behind them, as well as calculations that must be compared.

So, how does Pinduoduo achieve low prices?

On the merchant side, Pinduoduo has set up a series of mechanisms and rules to provide traffic support to merchants who give low prices, and the lower the price, the greater the chance of product exposure, so as to motivate merchants to reduce prices.

For example, in the investment promotion rules of the big promotion, the platform will have clear requirements for the price of goods, and at the same time require merchants to accept the concessions of activities such as cross-store full reduction and official discount, otherwise they will not be able to enter the big promotion venue. Every year, Double 11, 618, New Year's Festival, 38 Festivals and other big promotions, the admission tickets are "the lowest price gets".

In 618 this year, Pinduoduo also launched an "automatic price follow-up" service. According to the service agreement, after the merchant authorizes the activation of the "automatic price follow-up" service, the platform will automatically modify the merchant's commodity price within a specific adjustment scope and time according to the sales of the whole network of the product (including existing goods and new products in the future), the platform's marketing activities, etc.

Source: Pinduoduo

Of course, this kind of automatic price matching will not reduce the price indefinitely, but reduce the price with the minimum requirements in line with the rules of the event, at most once a day, and the merchant can also adjust it according to the actual situation. Once turned on, the merchant's traffic to participate in the event will be doubled.

Some people will ask, if those merchants who are unwilling to reduce prices withdraw from the big promotion, will not they bring losses to Pinduoduo?

In fact, a considerable number of small and medium-sized businesses are able to accept low prices, and small profits and quick sales are their basic strategy. What's more, now low prices have become the consensus of major platforms, and the price thresholds of big promotions are almost the same.

What's more, the current market as a whole is oversupplied, and the industry lacks buyers rather than sellers, so Pinduoduo may be more worried about consumer dissatisfaction because the price is not low enough than losing merchants.

However, it is true that there are merchants with high customer unit prices who do not buy it. Especially for businesses with small single product sales scale and low profit margins, it is "selling one order and losing one order" to reduce the price. Moreover, many big brands have a strict price control system, so they must keep the online and offline prices consistent, and will not mess with prices for the sake of traffic.

For this part of the merchants, Pinduoduo had to "pay out of pocket" and use subsidies to achieve low prices.

In 2019, Pinduoduo officially opened a 10 billion subsidy channel. Pinduoduo's 10 billion subsidy is aimed at goods with higher prices, less fluctuations, and wide recognition, such as iPhone, Feitian Moutai, etc., which have obvious price comparison advantages, so they can quickly establish a low-price mentality.

In order to subsidize, Pinduoduo also made a bloody investment. You must know that in 2018, when the subsidy of 10 billion yuan was not implemented, Pinduoduo's marketing expenditure was 13.4 billion yuan, and it directly doubled to 27.1 billion yuan after the introduction of the 10 billion subsidy in 2019. In the following years, it gradually increased, and by 2022, the marketing expenditure directly rose to 54.3 billion yuan.

Some research institutions have calculated based on the data of 2019 that in the fourth quarter of 2019 alone, Pinduoduo's subsidy expenditure of 10 billion yuan exceeded 5 billion, with an average platform subsidy of 15% per commodity, and the annual subsidy expenditure was more than 10 billion, which can be described as a genuine "10 billion" subsidy.

Source: Pinduoduo

On the surface, Pinduoduo has lost money by spending a lot of money to subsidize users, but in fact, it is still profitable.

First, subsidies are conducive to acquiring new users, especially those with high unit value in first- and second-tier cities. It is difficult for them to accept a new platform after they have formed consumption habits, so using real money to gain favor is the most efficient way, and no one will have trouble with money.

Second, subsidies are conducive to establishing brand image and increasing the unit price of user consumption. Pinduoduo's 10 billion subsidies have introduced a large number of high-end products, improving the image of Pinduoduo that used to only "sink", and largely reversing the public's reputation.

Third, through subsidies, users can form repurchases. Subsidies can be regarded as a process of building users' minds, and when users taste the sweetness of tens of billions of subsidies, it is easy to generate path dependence, continue to buy repeatedly on the same platform, and eventually expand to goods without subsidies.

can achieve low prices in a variety of forms, perhaps this is why only Pinduoduo dares to continue to carry out big promotions.

Is it still necessary for e-commerce promotions to exist?

From the first Double 11 in 2009 to the present, the e-commerce promotion has gone through 15 years. But as time goes on, consumers seem to be less and less interested in big deals.

Ten years ago, people would put down what they were doing because of big promotions, plan the goods they wanted to buy in advance, and squat in front of the screen to place orders, just like grabbing concert tickets for idols. But now, the time of the big promotion is getting longer and longer, and the intensity is not as strong as before, and there are also chilling operations such as "first rising and then falling", so the expectation of the big promotion has dropped significantly.

What's more, the rise of live e-commerce has raised the threshold for consumers, and it seems that there are big promotions every day in the live broadcast room, and there are always low-cost live broadcast rooms. As a result, the need for consumers to participate in the promotion is diminished.

Indeed, at the moment of the normalization of low prices, the significance of e-commerce promotions needs to be re-examined, and its form and gameplay also need to be changed urgently. When the "carnival" has calmed down, the "carnival" will only be an empty shell.

Author | The wind is clear

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