While stepping up the promotion of Temu's Canadian internal testing, Pinduoduo dropped another depth charge in the United States.
At 7:30 a.m. Beijing time on February 13, the 2023 Super Bowl was officially held at the State Farm Stadium in Glendale, Arizona, USA, and Rihanna, who has not appeared for seven years, caused a sensation on major social media with a thirteen-minute comeback performance.
In North America, the Super Bowl is the most widely spread and influential sporting event, with 99.18 million viewers in the United States in 2022. The annual Super Bowl advertising situation is also often used by the advertising industry as a weather vane to observe trend changes.
Among them, Temu successfully brushed the screen with Rihanna with the brand slogan "Shop Like a Billionaire" and the brainwashing divine comedy, which aroused the interest of the audience. According to 36Kr reports: According to the price of the previous Super Bowl advertising, the two 30-second brand advertisements bought by Pinduoduo cost a total of nearly 14 million US dollars (nearly 100 million yuan) in advertising expenses, nearly 230,000 US dollars per second, which was jokingly called by netizens that "burning money is not so fast".
This kind of "burning money" behavior is reflected in the evaluation obtained back in China, "familiar formula, familiar taste". Shein has verified the feasibility of the M2C model in the United States and Europe, and Pinduoduo must copy its past "pinshi boxing method" that has been invincible in the domestic market while following up without hesitation.
In fiscal 2021, Pinduoduo's annual net profit was 7,768.7 million yuan, achieving annual profit for the first time, which obviously provided capital for Temu to "scatter coins" in the United States. However, compared with Shein's development route of fully using foreign markets to grow, Pinduoduo still seems to continue the experience of "tried and tested" by traditional domestic manufacturers: that is, using domestic "profit surplus" to subsidize the tentative overseas strategy.
However, to what extent is this "making money at home and spending money in the United States" sustainable? And how likely is it to bring Temu a truly loyal group of platform users? There is probably only one thing that can be determined: to seize the market at a low price, but also to spend thousands of dollars on advertising, and at the same time enter Canada, which means that the yuan spent by Temu is difficult to recover in the short term, and it will take time to make a profit.
1. "Pinyin" boxing method, overseas flowering
It has been more than five months since Pinduoduo entered overseas in September.
Although it borrowed the transfusion of Pinduoduo's domestic profits, and to some extent "sacrificed" Chinese merchants to serve American users (see Chapter 2 for details), from the current data, Temu is performing relatively well.
In its second week of launch, Temu saw an 860% surge in downloads on both iOS and Google Play in the US; Within 2 months of its launch, it began to continuously hold the top spot in the US app download rankings, surpassing Douyin's overseas version of TikTok and fashion cross-border e-commerce Shein, and was even more popular than If Yooou, which was launched by Byte at the same time.
It is reported that Shein, the second largest e-commerce platform in the United States and with 120 million users, directly opened a red alert, forcing merchants to "choose one of the two" between Shein and Temu, and "never hire" employees who jump to Temu.
Temu's attitude to opening the robbery mode is very clear, and some employees of cross-border e-commerce companies said that after experiencing large-scale layoffs in the company, they received an interview invitation from Temu's team.
And to produce such an effect, it is naturally inseparable from its tried and tested "pinshi" boxing method in China: low price, "brainwashing", user experience and social fission.
Low price, as the first trick of Pinduoduo's domestic fame, is more and more convenient to use when expanding abroad.
For example, if you search for "men's socks" on both Termu and Shein, the price of Temu's goods in the first few rows of the search results is $2-15; The prices of the goods Shein displayed were concentrated at $20-30. Search for "headphones" and Temu's products are as low as $1.99, while each model that appears in Shein is at least $20.
In addition, the large-scale delivery of coupons and the old user recommendation code and other operations take turns, the former absorbs a large number of new users to become old users, the latter allows old users to spontaneously invite new users, creating a large number of "clear streams" keen to share Termu recommendation codes online, forming a trend of sending Termu recommendation codes between acquaintances and even acquaintances to strangers.
The second trick of "brainwashing" allowed American netizens to really experience the comfort of domestic netizens.
This time to throw money at the American Spring Festival Gala, the most intuitive "brainwashing" is the advertising slogan of "Shop Like a Billionaire", many netizens said that "can't forget", and the previous advertising slogan "Team Up, Price Down (buy more people, save more money)" although slightly inferior, but also similar to the domestic "Pinduoduo, Pinduoduo, Fight more, Save more" brainwashing divine comedy has the same wonder.
Not only that, but Temu also places a lot of brainwashing ads on many video sites. For example, a streamer takes out a blank piece of paper with $20 printed on it and shreds it; Then he took out a blank piece of $10 paper, shredded it, and said, "No $20, no $10, just $5.24!" ”
This is obviously a copy of the domestic Pinduoduo and Douyin advertisements to Temu, even if the plot is awkward, the pronunciation is inaccurate, and the level is extremely low, but under repeated transmission, consumers are also deeply impressed by such magical advertisements that are implanted with "low price".
The third trick is to give users an excellent shopping experience.
For example, the urgent countdown to "Free shipping on all orders" clearly visible on Temu's official website creates a sense of urgency that the offer is short and must be placed immediately. Although it seems to be looping at present, for consumers who often place orders on Amazon and Shein and need to pay for shipping, waiving shipping is obviously a great temptation.
Moreover, not only the shipping fee is now reduced, the return period is also extremely long, compared with Amazon and Shein's return service within 30 days and 45 days, Temu's 90-day ultra-long return service is particularly prominent, providing a long "remorse period" for consumers who do not trust quality, and buying goods with more confidence, the purpose is to allow users to have the ultimate shopping experience and form repeat customers.
The social fission of the fourth trick is also used in Temu's hands, which is more than the WeChat that has been spread.
In addition to the aforementioned new users, "chopping a knife" is also taken out as a big move. On Facebook, Twitter, Instagram and other mainstream social platforms, you can often see a lot of old and new links, and each 3 friends invited get 150 yuan, and a collective action of "wool" is carried out.
Under the offensive of this set of combination punches, Temu made rapid efforts in the early stage, and Temu GMV reached $250 million in less than three months after its launch, and GMV rushed to $200 million in January this year.
The scene in CCTV's "Dialogue" program in 2016 also seems to have been called back seven years later, in which Huang Zheng said to Zhang Yiming: "If I were Zhang Yiming, I would promote globalization more radically."
Second, knife-wielding merchants, domestic moths
Low price free shipping, even within 90 days can be returned, users are indeed satisfied, but can the merchant hold on?
Pinduoduo has its own strategy: casting a wide net, eliminating the big thing, and only paying for the result. According to media interviews, the threshold for merchant demand in TMEIU is extremely low, as long as it is an integration of industry and trade, brand owners, traders, factories, enterprise entities, individual industrial and commercial enterprises, the goods are best to have CPSC, CPC and other certification, there can be a certification free channel in the early stage, and the later stage must be supplemented with certification.
In this case, there is a phenomenon of "first get on the bus and then make up the ticket", indicating that the first pursuit is to quickly expand the supplier system, so that the goods going to sea are as many and complete as possible, so that users attracted by traffic can have orders. A chaotic ecology quickly and abruptly took shape.
Suppliers who have passed the basic audit of the platform only need to ensure low prices, ensure quality, and send goods to Temu's domestic warehouse on time. This, in turn, means that regardless of whether the merchant is able or not, you will take you away as long as you are willing to get in the car, and the result will follow the rules of the platform.
Some industry insiders said that Temu has to subsidize $30 per order, and Temu's marketing expenses in the first month of its launch are as high as 1 billion yuan. For businesses, this subsidy is a drop in the bucket and does not play any role in growing profits.
And once it is found that these goods are low-priced and low-quality white-label goods, Pinduoduo will balance by fining suppliers money, it is understood that it is generally about 3 times, as the cost of handling complaints, and in the official statement, the order with quality refund will be fined ten times the price of the goods.
Some insiders said that Temu's whole set of game rules is survival of the fittest. In the early stage of large-scale investment, a large number of sellers rushed in, over time, more price-competitive factories, supply chains settled, they will continue to compare prices, fight, supply prices change, but the platform price remains unchanged, the lower the price, the better, all inventory pressure can only be carried by merchants.
Even if it is eliminated, losses and bankruptcy can only consider itself unlucky, and Temu has no reason to pay for this group. In addition to the threats to businesses on the surface, there are many hidden threats to users.
In the process of constantly pulling new users, once there are very few new users, whether there will be group complaints that were once difficult to control in China, it will begin to be huge, and then countless people are difficult to slash, everyone shouts and beats.
According to media reports, some Temu staff said that the company is currently facing many customer complaints, which mainly come from problems such as product quality and service substandard.
Moreover, the major giants in China have long gone to sea, more than ten years of Ali, nine years of Jingdong, less than half a year of Pinduoduo, although the results are very good, far beyond Byte's If Yooou, but after all, there is no time to accumulate, the influence is not unique, the final result is difficult to predict.
However, if Pinduoduo sits on the boat going to sea, if it does not support the user with one hand and the merchant with the other, it will become more and more difficult to maintain the current balance with the continuous invasion of wind and waves.
III. Write at the end
During the rise of Pinduoduo, the scene of barbaric growth is still vividly remembered, and now similar plots are playing out overseas, but with a more mature system in a market that has never been baptized.
Compared with Pinduoduo, which grew up from Ali Jingdong, today's Termu obviously has a more solid backing, because Pinduoduo has made money in China, and the more it earns: in the latest quarter's Q3 financial report, Pinduoduo made a profit of 10.59 billion yuan, up 546% year-on-year.
However, relying solely on this money, or copying the domestic business model, is not enough to ensure that Temu will succeed, because from these indicators, Ali should have succeeded a long time ago. If Temu wants to really gain a foothold in North America, it probably needs to come up with a new business model of efficiency dimensionality reduction like Shein did, rather than just sprinkling "Chinese currency" in the United States.
As a pre-strategy, Termu mobilizes merchant groups, takes advantage of the momentum to punch cards, and opens up the US market. However, as a business going overseas, merchants can get limited support in China, and as foreign trade objects, merchants can get limited protection in the United States, as a platform, Pinduoduo and Temu should take more responsibility.
Users and marketing are important, but don't forget where the merchants and money come from.
*The title image and the accompanying picture in the text are from the Internet.