So far, its super brain and atomized tissue have worked efficiently. In a complex business environment, pinduoduo's potential successes and failures are also closely related to this.
Wen 丨 Zhang Qin Guan Yiwen
Edited by 丨Guan Yiwen Song Wei
When people talk about Pinduoduo (NASDAQ:PDD), they will use the words "can't see" and "can't understand" to describe it. As a $75.7 billion public company, there is little disclosure except for the financial report data and shareholder letters that must be disclosed. How the company works, who its management is, and some information may not even be clear to its employees and investors.
One of Pinduoduo's core managers, Gu Wanlian's name never appeared in the public documents of the listed company; employees could not see the organizational structure, could not see employees outside the department, and were not allowed to set up WeChat groups on the internal office system.
After the listing, Pinduoduo founder Huang Zheng has not been interviewed again, and since stepping down as chairman in 2021, he has rarely appeared in Pinduoduo's office, and the last time employees saw him was in September last year. Some people in the venture capital industry who have communicated with him in the past also said that there has been no news of Huang Zheng for several months.
Huang Zheng said in a small communication many years ago that he believes that businessmen should not pay too much attention and hopes that everyone will forget about him. He believes that good entrepreneurs are like corals, and corals are constantly dying, forming coral reefs and allowing fish to grow around.
Many businesses and entrepreneurs in China want to keep a low profile, but being low doesn't mean being hidden.
In the eyes of some people who have come into contact with Huang Zheng, Huang Zheng is highly sensitive to competition and extremely alert to reality. This is related to the environment in which Pinduoduo grows. At the beginning of his birth, Huang Zheng recognized the cruel competition situation of the Chinese Internet - the table is full everywhere, "the people at the table do not want you to come up, and the people under the table do not want you to go up, I will inevitably suffer a double blow; coupled with the rapid growth rate, we will face all the problems that Taobao has faced in a short period of time." For a long time, Pinduoduo's only goal was efficiency, because it was faster than others to survive.
The listing brought the company into the public eye, becoming more open and transparent than before, but these are limited. The death of a young grocer at the end of 2020 has made more people, including its employees, start thinking and paying attention to the other side of this young company. The media and some of its employees have described it as "closed" and "rough management", but these are not the whole picture, or just a single side of it.
Pinduoduo is still an important and unique presence of the Chinese Internet, according to QuestMobile data, 360 million people opened it every day in December last year, it is one of the most effective Internet companies, and its new business Duoduoduo shows strong combat effectiveness.
In this article, we try to present as many aspects of Pinduoduo as possible, how its particular system is formed and how it works; at what stage this particular management method works and at what stage it will fail; and who actually manages the company.
Huang Zheng: Super brain
Many people who have communicated with Huang Zheng have called him extremely infectious, has a strong ability to think abstractly, pays attention to the world and human beings, and has a complexity that exceeds most Internet entrepreneurs.
Huang Zheng, born in 1980, lived frugally, walking to and from work, taking the subway, and some employees would see him wearing torn clothes. Huang Zheng on the idealistic side will talk about his thoughts on time, the physical world, people and uncertainty in the shareholder letter in April 2020, when the epidemic occurs; he was once keen to express and will discuss "unpredictable love" in the public account; he hopes to reform the supply side and change China's agriculture, and he personally wants to engage in non-profit scientific research.
Huang Zheng on the realist side retired earlier than all Internet company founders, and Only 5 years after Pinduoduo was founded, Huang Zheng stepped down as CEO. A few months later, in March 2021, Huang Zheng stepped down as chairman.
After stepping down as CEO, Huang Zheng is still involved in the management of the company. The most important strategic project of Pinduoduo this year- Duoduo buys vegetables, that is, Huang Zheng gave the instruction of "going all out" when the management was still hesitating, and he also called on everyone to do this good and bitter long-term business in the only anniversary speech for all employees that year, saying that Duoduo buying vegetables is the "touchstone" of Pinduoduo people. He was in charge of the firm's GR (Government Relations), PR (Public Relations), HR (Human Resources), IR (Investor Relations) and Outbound Investment departments.
Later, Huang Zheng further stepped down as chairman of Pinduoduo and gave up super voting rights at the same time. According to the disclosure of the official website of Investor Relations, there are currently six board members of Pinduoduo - Chen Lei, current chairman and CEO, Shen Nanpeng, founding and managing partner of Sequoia China, Lin Haifeng, president of Tencent Fintech, Lu Qi, founder of Qicaichuang and chairman of Pinduoduo's compensation committee, Yang Rongwen, chairman of the governance committee, and Liang Jinsong, chairman of the audit committee.
After stepping down as chairman, Huang Zheng came to the company less, and his office remained, but the door was locked for a long time and no one used it. The last time an employee saw him come to the company to hold a three-person meeting with Gu Loulou and Chen Lei was in September last year.
As he said when he stepped down as chairman, "I want to do some research in food science and life sciences." Some people in the investment circle said that Huang Zheng had revealed that he was considering applying for a biology-related course at MIT.
Like those founders who are not on the front line but still care about product details, Huang Zheng will also ask why a book cannot be found in Pinduoduo or is not the lowest price on the whole network, and the authors he consults are very unpopular, such as Stoic philosopher Seneca, who wrote "The Gentleness of the Strong" and "On Happy Life".
At some point, his presence is strongly felt by the company's front-line business executives. For example, in 2021, many "More Reading Month" promotional activities will be held for consumers, and Huang Zheng will directly assign work to supervisors, involving target groups, publicity, subsidy activities and so on.
Huang Zheng is still the largest shareholder of Pinduoduo, holding 28.1% of the shares, and he gave up the super voting right, but the voting rights are still there, and it is handed over to the board of directors for centralized decision-making. According to the shareholding ratio, the top three voting rights of Pinduoduo are Huang Zheng, Tencent (15.6%) and Pinduoduo partner related entities (7.4%).
According to the disclosure, Pinduoduo's partners have the right to appoint executive directors and nominate the CEO of the recommended company. However, the system has not yet taken effect, Pinduoduo's partnership system requires at least 5 partners to be effective, and the only partners clearly mentioned in the public annual report are Huang Zheng and Chen Lei.
Huang Zheng is neither fully retired nor does he control the company in every detail, as some speculation suggests. But he controls the strategic direction, and his thinking and spirit have profoundly affected the company. The company's core team has not changed, and they are still deeply trusted by Huang Zheng and surround huang Zheng.
Gu Loulou (flower name: Abu) is responsible for managing the company's main business internally and is regarded by employees as the real number two person in the company; Chen Lei (flower name: tudou), who succeeded Huang Zheng as CEO and chairman, is also deeply trusted by Huang Zheng and is responsible for the necessary external communication.
The two started a business with Huang Zheng as early as 2007, when Abu was still studying for a master's degree and Chen Lei had just returned from the United States. Consumer electronics website Ouku network, agency operation company Leqi, dream hunting in the game period, spelling goods to today's Pinduoduo, these Huang Zheng after returning to China to start a business project, Abu and Chen Lei are struggling with Huang Zheng.
"Alumni" is Huang Zheng's most trusted group, and the executive team basically comes from his student days. "Trust" is one of the criteria for the flow of Pinduoduo's talent echelon. A person who had started a business with Huang Zheng told LatePost that he observed that Huang Zheng emphasized "credit card logic" in his early employment. The person interpreted it this way: at the beginning, the quota will be given, but it is difficult to accumulate the quota, rely on many performances, lose credibility is very easy, a default is enough, and it is difficult to recover.
Therefore, the core layer of Pinduoduo is very stable and extremely united, because they are all screened by time.
Also appearing on the official website of Pinduoduo Investor Relations are Zheng Zhenwei, senior vice president of product development (flower name: Dingdang), and Xiao Yunyun, senior vice president of operations (flower name: Ah Kuan). Dingdang joined Huang Zheng's entrepreneurial team from Baidu in 2011 and later served as the CEO of Dream Seeking; Like Abu, Ah Kuan, like Abu, has followed Huang Zheng to start a business with Huang Zheng since the earliest Ouku period in 2007. In addition, The head of the Government and Public Relations of Pinduoduo, Xiaoshulin (Hanamei), the head of the marketing department, Sakuragi (Hana), the persimmon (Hana name), who was responsible for the technology of the marketing department, and Mango (Huaming), who was previously cho and later responsible for attracting investment, have also started a business with Huang Zheng for many years, and the first three are Huang Zheng's alumni at Zhejiang University.
Pinduoduo has a flat structure, and the company level only includes first-level supervisors, second-level supervisors, team leaders and employees. According to the incomplete statistics of "Late Post", including more than one grocery, the total number of first-level supervisors of Pinduoduo does not exceed 100. According to the latest annual report, the number of employees in Pinduoduo is currently less than 8,000, while Alibaba and JD.com currently have a total of more than 250,000 and 360,000 employees, respectively.
The working status of Pinduoduo's grassroots employees is like an atom, the information authority obtained is very small, the work indicators are dismantled in great detail, and the implementation is also around one or two indicators. Pinduoduo all staff exchange using flower names, hidden real names, encounter problems in the business, can only ask colleagues in the group, colleague A said that this problem belongs to who is in charge, and then go to the internal communication software to search for flower names, but the software can not see the real name, even the gender is not displayed. This is both for safety and for the sake of greater responsibility, "there will never be a corresponding responsible person." ”
A former employee of Pinduoduo, who worked at another head Internet company, said that he was very uncomfortable at first, and later he understood that this was more for information security, "Pinduoduo is willing to sacrifice part of the efficiency brought by work and tools for safety, and then let employees increase working hours to make up for the lost efficiency." ”
Until the listing in 2018, the company rose to a market value of 30 or 40 billion US dollars, and Pinduoduo is still using rough organizational tools that are considered backward by the outside world to manage. For a long time, the attendance records of Pinduoduo employees were exported from the punch card machine by the administration every month, and then manually imported into an Excel table. At the end of 2019, the company only built an OA system, and the internal communication software Knock was just launched a few months ago, and earlier, thousands of employees communicated in a QQ group, and important tasks relied on "word of mouth". The internal documentation system Note and the demand system Brook will not be available until after 2020. Before 2018, invoices exceeding 2,000 yuan required the signature of Huang Zheng or Abu.
A person who joined Pinduoduo after 2019 has seen Huang Zheng bury his head in the office to approve stacks of paper invoices. This person believes that the original management method stems from the fact that for Pinduoduo at that time, only survival was the most important. At the same time, "paper invoices can be seen more clearly and have a greater sense of evidence." Huang Zheng once approved that a certain department used an expensive coffee machine at an event.
An executive of a leading Internet company once commented that good organizational ability is first the understanding of strategy, and then the selection of organizational ability based on strategy. Pinduoduo's organizational capabilities cannot simply define good or bad, but they are highly matched to strategies.
This management method has great advantages in the fierce business competition, in the face of the high pressure of Ali and JD.com, the core strategy of Pinduoduo in the past is to pull the GMV (turnover) up through aggressive play. In 2019, Huang Zheng frequently asked employees to "force a hole", and it was also this year that Huang Zheng announced that Pinduoduo's real payment GMV had surpassed JD.com (but there was still a certain gap in the data disclosed in the financial report), and became the closest e-commerce platform to Ali in terms of user scale.
Pinduoduo proves this: a company operates effectively, and does not necessarily need advanced management tools and concepts, strong cultural output. Super brain decision-making, rapid management orders, and employees "don't move" can also establish an equally or even more efficient operating system.
An industry insider who has been tracking Pinduoduo for a long time said that human nature has many weaknesses, and it is more effective to grasp the most fundamental part of human nature than to establish rules through a careful system to manage employees. For example, immediate incentives; higher pay than expected is not enough, it must be far beyond expectations; and when the option expires, promise to give another super high option at the same time as postponement. It's hard to say no.
It is understood that in 2020, there was a supervisor who reflected the company's management problems, and he got a reply (to the effect), "When we can't compensate everyone in terms of system or time, we can only compensate everyone financially." ”
In management, this belongs to a type of management genre, which is not uncommon, but Pinduoduo implements it to the extreme. American psychologist Douglas McGregor once proposed X Theory, X Theory believes that human nature is lazy, work-averse, the vast majority of people have no ambition, only under the guidance of willing to accept work, the only incentive is to increase financial rewards, the most effective management tool is punishment.
One investor said that in some ways, he believes that ByteDance and Pinduoduo are two extremes, "one is not to understand human nature, with the help of management tools and methodologies to crush; the opposite is to understand and use human nature to the extreme." ”
For the creator of the system, all this is not the end, but only an intermediate process, a tool to achieve the ultimate mission.
Every successful entrepreneur has both pragmatism and idealism, but both sides of Huang Zheng are more extreme. In our understanding, the Huang Zheng described by the grass-roots employees and the management is two people, and the Huang Zheng in the eyes of different investors is also very different, and the Huang Zheng who buried his head in the invoice in the early years and wrote "Turning "Capitalism Upside Down" does not look like the same person, but this is Huang Zheng.
Abu: The actual manager inside
An employee of Huang Zheng's early entrepreneurial project told LatePost that a company executive had met with a group of people during their entrepreneurial period and concluded that the "consistency" of goals, thinking and action was their most important feature.
Before Huang Zheng retired, Abu was responsible for C-end, B-end, marketing, live broadcasting, platform governance and many other businesses. At this stage, the two most important indicators within Pinduoduo - DAU (number of daily active users) and GMV, the heaviest investment in business duoduo, their corresponding market and investment departments are under Abu.
Abu is Xiao Huangzheng's fourth-term sister at the School of Computer Science at Zhejiang University, and she ranked Huang Zheng first in the acknowledgment section of her master's degree thesis. In 2007, Abu joined Huang Zheng's first entrepreneurial project as an engineer as an intern, and has since fought with Huang Zheng until today.
Chen Lei, the current CEO and chairman of Pinduoduo, is an alumnus of Huang Zheng at the University of Wisconsin in the United States and has been starting a business with Huang Zheng since 2007. Chen Lei's workstation has a large stack of computer science bibliographies. As a spokesman for Pinduoduo, Chen Lei needed to attend various necessary government events and earnings call conferences, and he successfully integrated into the new role of CEO, carefully rehearsing each public speech in his seat, and reciting the speech in a low voice. Occasionally, I will read the original English book at the workstation.
Judging from the financial report meeting, Chen Lei also led the team to "new farmers" and "tens of billions of agricultural research" and other projects. A person close to Pinduoduo said that Chen Lei is currently mainly responsible for some technology and strategy.
Early employees often miss Pinduoduo, which was relatively relaxed and free before 2018. In 2018, when all members of Pinduoduo used QQ, there was a large group called "Shanghai Office", everyone was inside, what work problems were directly sent in the group, the relevant personnel would jump out one after another to solve the problem, the employees would also chat, and Huang Zheng was also in the group.
Until the arrival of 2019, Pinduoduo has become a non-negligible presence in Chinese business, and competition with Ali has intensified, which is also a key turning point for Pinduoduo.
In a TV program cooperation activity in early 2019, the "100 yuan no threshold coupon" customized by Pinduoduo for the program had a technical loophole, and a large number of users "took away the wool" in the middle of the night, but Pinduoduo's technical department did not go offline until nearly 10 o'clock the next morning. This made Pinduoduo lose a lot of money, and made the management realize that there were serious problems in the company's management.
According to the recollection of four employees, Abu said that the company did not do a good job in all aspects of management, thinking that everyone was "too free and loose", she said, "We found that some colleagues began to exploit the loopholes in the internal system", accusing some employees of finding colleagues to punch cards on their behalf.
After the annual meeting, Abu began a series of drastic administrative and management reforms internally.
In response to the "coupon" incident, Abujan provided a solution to avoid similar problems, and the final solution was adopted in groups, with technicians on duty for 24 hours, and one person every 12 hours to keep an eye on it, which is a great work intensity.
The punch card system has also become stricter, sometimes even if it is only 1 minute late, it will be deducted 3 hours of wages; because of the fear of data leakage, Pinduoduo has adopted the internally developed communication software Knock since June 2019, and the information permissions of employees have been tightened, and they have lost the right to view the real-name information of orders, users and merchants in the background. An employee said that before 2018, they would only be tired before and after the e-commerce festival, and they could leave work from 9 to 10 o'clock, and after 2019, the work intensity increased.
In the past, the company's various WeChat groups no longer need to exist. One employee said that if the WeChat group was discovered by HR, the group owner would be remembered, "Almost two months later, the WeChat group was almost dissolved." ”
A small conference room on the high floor of Shanghai Jinhongqiao Center that can accommodate up to 4 people is Abu's "temporary combat center", the office is very simple, there is no decoration, no windows, a large number of express boxes around her, part of which is Abu experience Pinduoduo product orders. Pinduoduo's recognized core departments are clustered on the same floor, such as the marketing department responsible for DAU growth, which is next to the conference room in Abu.
Abu is energetic and meticulous in his management. When the number of employees in the company exceeds 6,000, the taxi reimbursement of employees exceeding certain amounts still requires Abu's approval.
Some employees concluded that Abu's management style is simple and direct, result-oriented, only to do and not to do, no intermediate state. She only asks when sales can be completed, when they can reach what percentage, and the rest is not so important.
Abu asks about business details, cares about the delivery costs and timeliness of different courier companies, pays attention to user experience, compares with Taobao and JD.com, and often places orders in Pinduoduo to experience the whole process of order delivery, and her order address will also include areas outside Shanghai. Pinduoduo's requirements for the payment success rate are 99.999%, and Abu sees that many particularly small problems will be solved immediately, even if the input-output ratio of solving small problems in the eyes of employees is very low, such as three or four engineers working overtime for one day to correct.
An industry insider who has communicated with Abu said that Abu has his own thinking about the e-commerce industry - she regards the supply chain as the most important and complex part of e-commerce, and it is also the weakest place of Pinduoduo; in the long run, Pinduoduo, JD.com and Taobao will converge; Abu regards live e-commerce as an operating tool and does not bring new value to Pinduoduo by default.
A former employee of Pinduoduo once shared on social platforms that Pinduoduo is a powerful efficiency machine, and management decisions are implemented from top to bottom at the fastest speed without deformation, such organizational efficiency is unparalleled in domestic Internet companies.
Huang Zheng created this machine, and Abu was the one who ensured the efficient operation of the machine.
"Refers to where to fight" of the first and second level supervisors
Different from centralized pyramid management and decentralized flat management, Pinduoduo is a complex, which is centralized flat management.
Pinduoduo requires employees to use flower names, and the earliest wave of executive names are "A" generations, such as A zhuang (Huang Zheng), Abu, Akuan, etc.; "fruit and vegetable generation" is also a relatively early and core executive, such as potatoes, mangoes, persimmons, etc.
Gu Loulou (flower name: Abu) and Chen Lei (flower name: potato) are the company's internal and external managers. The next level is the first-level supervisor of Pinduoduo, and "Late Post" has sorted out 13 of them. Most of the core first-level supervisors are related to user growth, such as Sakuragi, the head of the marketing department, the decision of the consumer side growth and the "slashing knife" project responsible for the grocery shopping business, Kant, who is responsible for projects such as Duoduo Orchard and Pinxiao Circle, Mai Kuo, who is responsible for live broadcast and short video business, and Persimmon, who is responsible for the technology of the marketing department.
In the recent year, a number of first- and second-level supervisors have been transferred to the project team and investment department that boosted dau. This involves the goals set by Pinduoduo in early 2021, that is, to increase the proportion of brand transaction volume (GMV), THE PEAK INCREASE OF DAU IS 50% year-on-year, and the large market of Duoduo's grocery business (GMV combined) exceeds that of Meituan Preferred.
In the performance appraisal in the first half of last year, the mobile phone manufacturer group of the marketing department led by Sakuragi was rated as an excellent project, and this group was responsible for pushing the mobile phone pop-up window to guide users to open the application to enhance the DAU.
In the past year (as of the end of September 2021), 867 million people have bought on Pinduoduo, 4 million more than Ali. For Pinduoduo, it is not so easy to attract new users in the future.
Pinduoduo is looking forward to more brands revealing the "official flag". The Investment Promotion Department and the newly established Superstar Group in early 2021 are also the departments and groups with the highest density of first-level supervisors. It is understood that Abu has high hopes for the Superstar group, and in April he personally wrote a list of brands that he hoped to pull in. Brands are still a bit hesitant, and most brands either operate through the shell of the dealer, or instruct the dealer to operate.
The main task of the SuperStar Group is to pull more well-known brands to open official flagship stores in Pinduoduo, with the participation of seven or eight first- and second-level supervisors, including the former head of manpower Mango (flower name), the implementation of the horse racing system in the group, not to be divided by industry, the indicator is the number of stores and turnover.
The first and second level supervisors can be flexibly moved and have strong execution. In 2020, Pinduoduo entered the community group purchase in a big way. This summer, Pinduoduo gathered thousands of employees, including a number of senior executives, to the front line of Duoduo's grocery shopping. According to a former employee, at the beginning of duoduo's grocery shopping, Dongju and Yingjun were the first two first-level supervisors to be sent out, and just after a meeting in the morning, two people bought a plane ticket in the afternoon, one went to Wuhan and one went to Nanchang. One employee was transferred to buy more vegetables and returned the rental house in Shanghai on the same day.
In an interview in 2016, Huang Zheng said that he made an analogy to the team, life is the process, "We are like migrant workers going to Shanghai to work, I moved bricks at the beginning of the poor level, and then washed the dishes, then became a chef, and then opened a restaurant after doing a good job." ”
Pinduoduo's management trainee system also follows this logic. Each management trainee will stay in the platform governance department for the first three months, deal with complaints about fake goods, logistics, etc., take care of the after-sales service, or go to the customer service department to answer consumer calls.
At present, Pinduoduo has not formulated a grade system and promotion system. What are the criteria for promotion and salary increases, and employees are not very clear. For example, Kakashi was not promoted to a first-level supervisor for creating tens of billions of subsidies; but a second-level supervisor of the Investment Promotion Department that promoted the strategic cooperation between Pinduoduo and Qinghe County, Hebei Province, the "cashmere capital of China", was promoted to a first-level supervisor.
But they have the industry's highest-priced pay packages. If you are willing to take the initiative to transfer to buy more vegetables, you will also get higher option rewards, and the option will be lifted by 50% by the end of the second year, and the remaining two years will be lifted by 25% per year. In the mid-2021 performance appraisal, the person in charge of the region who bought vegetables to buy vegetables received stock awards worth more than 5 million yuan for outstanding performance.
In Pinduoduo, the option vesting period is four years, the lock-up period is three years, the first three years can not get anything, the last four years get 1/4 of each year, this rule was changed after the listing of Pinduoduo. But at present, there are changes, according to the "LatePost" understanding, before the first batch of options of Pinduoduo was lifted in September last year, employees holding more than 100,000 options received an extension notice, and the employees involved in the extension were mostly first-level supervisors, with about dozens of people. The company's reason for the extension is that the current market environment is relatively volatile and not suitable for trading.
The company requires everyone to postpone the exercise of the right, the specific recovery time is uncertain, and it is necessary to wait for the company's follow-up notice.
Pinduoduo's core employees and supervisors are also relatively difficult to leave, and it is understood that a Duoduo grocery employee has experienced 10 retention lobbies before leaving.
Buy more vegetables: the most flexible parts
Around the eleventh day of 2019, the management of Pinduoduo had a centralized organizational study, and the learning material was a book on management order from Huawei, called "Entropy Reduction". In the words of Ren Zhengfei, "the circular flow of the strategic reserve team, the promotion of cadres out of the ordinary, the elimination of burnout employees, and the retirement at a reasonable age are all entropy reductions." The purpose of entropy reduction is to make the best contribution for everyone at the best time, in the best role.
Huang Zheng is clearly aware of this problem, and in his internal speech on the fifth anniversary of Pinduoduo on October 10, 2020, he reminded employees that the company is becoming more and more like Ali, and a lot of big company diseases are emerging.
He put forward three internal problems, the first point is that the work group is getting bigger and bigger, and dozens of people in the group have no one to admit responsibility, the second point is that some of the business needs have become so that the leaders can see, or do beautiful PPT, the third point is that the employees of the grocery shopping business are working the front line, and other employees are posting travel photos in the circle of friends during the National Day holiday. He used a vivid metaphor, "Like a cute child who has not aged before he dies, a 5-year-old has a 70-year-old wrinkle on his forehead." ”
This was also Huang Zheng's last internal plenary speech. In his speech, Huang Zheng also stressed the need to clearly understand the situation, duties, and exercise. When it comes to exercising, Huang Zheng also called on employees not to hope for "walking in the breeze" but to "run and raise barbells."
He pointed out that Buying Vegetables is a "touchstone" project of Pinduoduo to "blow up the tip of the pyramid". This stems from Huawei's internal article "It's Time for Huawei to Blow Up the R&D Pyramid" in 2016 - old employees do new business, and all employees must be rejuvenated. At that time, Pinduoduo mobilized more than 1,000 people to go to all parts of the country to prepare for Duoduo's grocery shopping, accounting for 1/6 of the total number of employees, and was personally led by Abu himself.
Because the business is all over the country, and in the face of strong opponents such as Meituan Preferred and Orange Heart Preferred, the organization of Duoduocai needs to be more flexible, and this business is allowed to innovate from the bottom up.
"LatePost" once reported that Duoduo buys vegetables in the "small central big place" - the organizational form of the opposite of the main station, and ranks among the top two in the industry in one year. The first thing the investment executives who arrived on the first day were to select the warehouse after arriving at the local area, "After the selection, you can do it, and everything is authorized to you." ”
The most important goal of buying vegetables in 2020 is to run, and starting in 2021, all provinces are trying to do the standardization of team building, focusing on a clear division of labor.
The division of labor in different provinces and regions is relatively flexible. Some provincial and regional responsible persons ("provincial governors") uniformly manage stores and production and marketing, while warehousing, business development, head operation, distribution, etc. are all responsible for the "city lord" (the person in charge of the city), and there are different business leaders under the "city lord"; and there are also some provinces and regions "governors" who are responsible for warehouses, distribution, stores, production and marketing.
The uncertainty of the pandemic has also made flexibility unavoidable. A former employee said that as soon as there is a new movement in the epidemic, the single volume of a city can more than triple on the day, which is a situation in which securities companies cannot run out according to the previous single volume modeling.
The team building of grass-roots employees also varies according to the situation in each province: warehouse sorting personnel in southern cities generally only look for temporary workers, temporary workers found by labor service companies are skilled enough and will not be lazy, and meituan's preferred employees will sign contracts with the main body of Meituan, and only the most basic work will be handed over to labor dispatch; in northern cities, the solution is to constantly recruit its own employees.
Local recruitment is not easy to do, a former employee said that it is actually difficult to only ask for no integrity problems, Pinduoduo will no longer transfer people from the main station, in addition to the high cost of the main station personnel, the main station super star team is now under great pressure.
In May and October 2021, Pinduoduo conducted two rounds of general salary increases and stock incentives for Duoduo's grocery workers. A number of employees confirmed that ordinary employees received no less than 100,000 yuan of stock incentives and 30% salary adjustments each time, and the incentives of provincial and regional leaders were determined according to performance and mergers, between one million yuan and ten million yuan.
Although a solid supply chain and logistics system have not yet been established, Duoduo still reached a turnover of 500 million yuan in a single month in November. In the same month, the total GMV of Duoduogou in the country was about 120% of meituan's preferred.
The organization of buying more vegetables is more flexible, but it is still unable to jump out of the management method of Pinduoduo. From July 2021, the provinces and regions of Duoduo buy vegetables required employees to punch in the warehouse, and cameras were successively installed in the warehouse.
Duoduo grocery shopping is a new business that distinguishes Pinduoduo from the main station e-commerce platform, and the positioning of "the second growth curve" is not accurate, and Huang Zheng once called it a "natural extension of the main station business" on the earnings call. Buying more vegetables is more like a breakthrough point for Pinduoduo to expand the second growth curve, which can extend upwards to agriculture and supply chains, and downwards to retail and local life in the same city.
The other side of the efficiency machine
Pinduoduo, which set a record for listing speed, failed to reproduce the rocket-like growth rate in 2021, whether it is to attract new users or increase the amount of single-user consumption.
"Pinduoduo avoids exchanging business details with investors and reaching consensus", on the evening of November 26, 2021, after pinduoduo's third quarterly report earnings meeting, analysts at US-funded brokerage Bernstein wrote with some anger in the research report. The foreign analyst said that there was very little valid information about the answers of Pinduoduo's management.
Some investors told LatePost, "I originally wanted to buy for 5 years, blindfolded, and then looked at it after 5 years, but now I can't wait." They couldn't see whether management cared about the fall in market value and the company's real strategy.
Pinduoduo failed to grow a significant innovation growth point like the "tens of billions of subsidies" in 2021. Pinduoduo's mission "more affordable, more fun", the main affordable competitors increased, from Taote, Juhuasuan, to Douyin e-commerce, Kuaishou e-commerce; let users go to Duoduo orchard watering and fertilization, under dozens of cheap small commodities and finally changed to a box of grapefruit operation play, it is not so effective, short video, live e-commerce to bring more fun to users.
It is understood that pinduoduo's "slash a knife" project was rated as the lowest "1" in the "271" performance score in the first half of 2021, in other words, Pinduoduo believes that relying on "slashing a knife" to pull new is not so effective. In the past, advertising, slashing knives and mobile phone pre-installation were regarded by the industry as the new "troika" of Pinduoduo.
The consensus of investors is that the live e-commerce of short video platforms will pose a threat to Pinduoduo. At the beginning of Kuaishou's start of e-commerce, Pinduoduo internally wanted to cooperate with Kuaishou, Pinduoduo to give goods, Kuaishou to give traffic, and finally the two did not talk about it, Kuaishou was afraid of Pinduoduo's directional digging anchor, Pinduoduo was afraid of Kuaishou crossing it to control goods and wash users, Pinduoduo chose to do it directly.
However, Pinduoduo does not have the main broadcast of talents, and the gross profit of goods is low, the lack of brand goods, and the traffic is distributed based on commodities, which is naturally not suitable for talents to accumulate fans; self-broadcasting by merchants is not professional. Live GMV, which was the focus of its business in 2020, failed to achieve its goals.
The staff was also a bit confused. October 10, 2021 happens to be Saturday, and the "Sixth Anniversary Internal Speech" has not arrived as promised, and the previous annual internal speech will reveal some of the company's current situation and future direction, as well as encouraging words.
Pinduoduo, which is in the period of rapid development, gives a salary higher than the market price in order to attract talents. When the option of the former supervisor is about to expire, Pinduoduo makes a promise of doubling in the future, so as to lengthen the time line for cashing in the option. With the departure of the first early employees who received the unbanned option, there will be more employees who will "wait for the option" to leave, and in addition to the option and the strict non-compete agreement, how to retain people is also a challenge for Pinduoduo.
A former employee said that many employees are still "stuck" in Pinduoduo because they "can't jump out", on the one hand, the business contacted by grass-roots employees is limited, such as new employees with glorious academic qualifications who do the tedious work of entering Excel forms every day, on the other hand, "no other company can catch the salary increase".
Just as Huang Zheng distinguishes between "expenses" and "assets", he believes that there is a special type of asset in the entrepreneurial process that is people who are united under a certain culture, and there is also a type of expense that is used to buy labor or skills. An employee has doubts that his affiliation at the company is moving from "assets" to the other pole of "expenses."
There are some signs that Pinduoduo's internal efficiency is declining, and more employees are feeling tired.
Working in Pinduoduo until late at night, employees will raise their heads and necks and see red "Duty" on the white wall, and the slogan "When you first started hiring, you saw who couldn't fight, and after working for a long time, you saw who had patience" (to the effect). What they themselves have to do is perform the work that has been dismantled very small. But over time, repetitive work and horse racing are drained, and employee patience is limited.
Throughout 2021, Pinduoduo's stock price has fallen by more than 70% at a higher point, and its current market value is $75.7 billion, which is 0.7 JD.com. By the end of September last year, Pinduoduo still had a staggering 867 million annual buyers, higher than the number of annual buyers in Alibaba's China retail market in the same period.
But there is no denying that this once high-speed train is slowing down, and in the year to the end of September 2021, the annual buyer growth rate of Pinduoduo has dropped from 40% two years ago to less than 20%; in the third quarter of last year, the growth rate of Pinduoduo's online marketing services (advertising revenue) fell to 40%, close to the lowest growth rate of listing during the epidemic in the first quarter of 2020, which has previously increased by more than 60% for five consecutive quarters.
In terms of organizational structure, Pinduoduo is like a functional organization with only two business groups, which is composed of two parts: the main station e-commerce and the community group buying business Duoduo. From the current business point of view, the relatively simple organizational management of Pinduoduo seems to be the best solution for being quite frugal. However, it seems difficult for this organization to continue fission or take on new business, and the management model of the Duoduo grocery organization almost adopts a logic that is contrary to the main station, which means more resource investment, higher uncertainty, and a surge in workload of core management.
Organization is the product of the environment, and large-scale corporate organizations are full of contradictions and highly self-consistent. It embodies both the wisdom and audacity of the builders, their fears, and their compromise with reality.
In a complex business environment, Pinduoduo's rapid growth is closely related to the rare simplicity of organizational management. In the future, the potential successes and failures of Pinduoduo are also closely related to this.
Shen Fangwei, Gong Fangyi, and intern Haining Sun also contributed to this article