A typical platform for shelf e-commerce to attack content: Pinduoduo

One

Pinduoduo does content, not grass for traffic

Doing content is a defensive action made by Pinduoduo under the competitive landscape. Its content-based position currently only has Duoduo Video and Duoduo Live Broadcast.

As a content product under the e-commerce platform, Duoduo Video has become one of the fastest growing players by relying on the "red envelope model". After its launch in February 2020, Duoduo Video DAU (daily active users) has exceeded 150 million from the end of last year to the beginning of 2023, and is currently stable at 1-120 million - not as good as Douyin (over 600 million) and Kuaishou (nearly 400 million), but more than Xiaohongshu (nearly 100 million). The peak user time exceeded 40 minutes, but it is currently stable at around 30 minutes (35 minutes for Channels users).

However, the live broadcast business has always been Pinduoduo's business that has not improved for a long time: since the launch of the live broadcast business in 2019, there has not been a famous head anchor, nor has there been a benchmark live broadcast business case. The live broadcast appeared in the bottom tab of Pinduoduo's homepage in September 2020, and was replaced by "Duoduo Video" in 2022 due to its performance not meeting expectations.

Since the beginning of this year, Duoduo Live, which has been dormant for a long time, has successively launched a number of incentive policies to recruit live broadcast merchants, service providers, and anchors on a large scale - which just shows the lack of live broadcast homework before.

Pinduoduo's mediocre results in the live broadcast business are not only due to the strategic considerations of the super brain, but also the inevitability of the business model. In the long run, its path to contentization will not be easy.

Two

In terms of strategic importance, live streaming is weaker than branding and grocery shopping

A company's first strategy determines the flow of resources. In recent years, Pinduoduo's main focus has been on branding and grocery shopping – hoping to increase revenue by adding SKUs, and more recently on cross-border business. With limited resources and personnel energy efficiency already highly extracted, Pinduoduo's energy invested in the main battlefield of grocery shopping is naturally higher than that of the secondary battlefield of live broadcasting.

In 2020, Taobao Live has built a complete ecology of talent anchors + merchant self-broadcasting, Kuaishou also has family teams such as Simba and Sanda, and Douyin has played Luo Yonghao's benchmark with heavy money, respectively on the anchor side and the supply chain side. Although Pinduoduo also invited Marbury, Zhou Tao and other star anchors to create momentum in the same year, Marbury's one-hour live broadcast sold less than 160 products, and there were only more than 20,000 people in the audience.

Due to the performance of the live broadcast business did not meet expectations, the original planned live broadcast business unit of Pinduoduo failed to land, and the content business of Pinduoduo fell silent after that. The demand for online grocery shopping spawned by the special period of the epidemic made Pinduoduo mobilize more than 1,000 people to prepare for Duoduo grocery shopping in 2020, accounting for nearly 1/6 of the total employees at that time.

Huang Zheng, founder of Pinduoduo, pointed out in his internal speech on the fifth anniversary of Pinduoduo on October 10, 2020, that buying vegetables is a "touchstone" project for Pinduoduo to "blow up the tip of the pyramid". In contrast, his evaluation of live streaming is a "tool attribute" business, which is "a tool for merchants to operate private domain traffic", correspondingly, Pinduoduo's live broadcast entrance was hidden in the product list on the homepage, product detail page, store page and chat page. Only businesses that do well in the private domain have the opportunity to be seen in the live broadcast room. However, for a platform like Pinduoduo, which exchanges low-priced items for outbreaks, it is difficult for merchants to have a "private domain".

Three

The business model and the type of merchant determine the difficulty of Pinduoduo to do content

From the perspective of business model, Pinduoduo focuses on "low price + single product explosion", combined with the centralized traffic distribution mechanism, to create the myth of explosive sales.

Once Li Jiaqi and Wei Ya were called "humanoid Juhuasuan", because they, like Juhuasuan and Pinduoduo, followed the model of "small profits but quick turnover". The "province" of live streaming e-commerce and the "province" of Pinduoduo are of the same origin, both from the gathering of demand.

In addition, Pinduoduo is higher than live streaming e-commerce in terms of the efficiency of low-price supply and matching. Because the latter is limited by several factors:

• Limited by time: Shelf e-commerce can stimulate and carry all-day shopping demand, and live streaming e-commerce only has a few hours of live broadcasting.

• Limited by traffic pool: Pinduoduo's low-priced products can get the whole network traffic, and live streaming e-commerce is to gather demand in the traffic pool of each anchor/brand.

• Limited by granularity: the granularity of Pinduoduo's aggregation demand to SKUs, and the granularity of live streaming e-commerce gathering needs to categories - because the private domain traffic of the anchor is likely to not match the SKU, most of the influencers will try to divide the category matrix account to solve the matching efficiency problem.

Therefore, when Pinduoduo has established a more efficient supply and demand matching model and has a low-price mentality, there is not much need to clone an existing business scenario and model again.

From the perspective of the type of merchants in Pinduoduo, the mainstream merchants are white-label factories. First, price is the biggest advantage of this type of merchant, and it does not need additional blessings from content. Merchants have limited ability and willingness to invest in content. Second, operating on behalf of service providers or conducting live broadcasts will greatly increase the operating costs of these merchants, but weaken the price advantage. For brand-oriented merchants, Pinduoduo's role positioning is often to clear inventory channels and will not invest content budgets in them.

From the perspective of the willingness of service providers and anchors to settle in, Pinduoduo's low unit price, coupled with the low bidding willingness of merchants, means that anchors' commissions are low, and it is difficult to attract influential influencers to settle in.

Four

Short videos rely on subsidies to "get to the top", but they may not last

Pinduoduo's content-based layout originally hoped for the live broadcast business, but then bet its chips on the short video business.

From the perspective of entrance settings, in 2020, when Pinduoduo first launched Duoduo Video, it was still hidden in the second-level section "function" in the "Personal Center", but by the beginning of 2022, Duoduo Video replaced "Live Broadcast" and officially launched the first-level entrance at the bottom of Pinduoduo's homepage. At present, the entrance to the content on the homepage of Pinduoduo is only "Duoduo Video" in the bottom bar Tab, and the live broadcast entrance is not directly found in the platform - after entering from "Duoduo Video", users need to swipe left to see the live broadcast recommendation.

From the perspective of resource allocation, Pinduoduo mainly obtains users through the mode of cash rewards: first, according to the user's browsing time and the number of videos, red envelopes are sent to the WeChat account in stages, and this part is borne by Pinduoduo; Second, merchants will be rewarded for withdrawing according to the total stay time of mature users on the platform and the number of videos, comments and likes, which shall be borne by the merchant. According to 36Kr, the amount of user subsidies given to Duoduo Video by Pinduoduo in 2022 is approaching 1 billion yuan.

The two measures have increased the penetration rate of Duoduo video users from 8% in February 2022 to 25% in July 2022, and the daily activity is currently stable at 1-120 million, and the peak user time is more than 40 minutes, which is currently stable at around 30 minutes.

Compared with the heavier model of live streaming e-commerce, involving supply chain, category supply, service providers and anchors, etc., the layout of short videos invests less energy, and brings more objective user growth. For Pinduoduo, which does not want to fall behind in the battle for user time, this is a shortcut. It used to rely on WeChat and tens of billions of subsidies to shape the price of mental drainage, and now it makes short videos, which is still to open up traffic outlets, rather than to achieve transformation through planting grass. It has been observed that there are few short videos with product links, and a large number of them are fringe videos - which shows that it does not expect consumers to have the urge to place an order after watching the short video.

The growth brought about by high subsidies is unsustainable. According to 36Kr, affected by the subsidy, data such as DAU and user duration of Duoduo Video fluctuated. In the second quarter of 2022, the largest subsidy amounted to 300 million to 400 million yuan, and Duoduo Video DAU increased from 100 million in the first quarter to 120 million. By the third quarter, DAU fell back to around 90 million due to the decline in subsidies. Pinduoduo increased the amount of subsidies in the fourth quarter, so that DAU reached a peak during Double 11 last year, exceeding 150 million.

Five

Duoduo live make-up classes: suppliers, service providers and anchors

In terms of category supply, in the previous live broadcast operation of Pinduoduo, the category scope was limited to categories such as fresh food and clothing that penetrated online at high speed, and there were relatively fixed requirements for category content in a single live broadcast room.

In March 2023, Pinduoduo took advantage of the advantages of the industrial belt to release the "100-Yield Plan", aiming to recruit merchants in the industrial belt to settle in and start store broadcasting, and realize the rapid expansion of platform categories. As long as new merchants settle in and participate in the "100-industry plan", they can get advertising red envelopes equivalent to up to 59,200 yuan, as well as tens of millions of free traffic support and other discounts on the premise of completing the corresponding task items.

At present, other platforms generally draw commission from merchants within the standard of 5%, and Duoduo Live currently does not charge merchants for service fees.

Before 2022, Pinduoduo officially did not provide live broadcast operation services, nor did it arrange supporting service providers, and merchants could only explore and operate on their own. Although most merchant brands have enabled relevant functions, they have long played recorded videos or promotional videos in the live broadcast room on a loop, and have not really operated the live broadcast. However, Duoduo Live has also put forward requirements for merchants to switch from recording to live broadcasting, and the recording function will be removed in the third quarter of 2023.

In terms of supporting service system, it is mainly divided into anchors and service providers:

(1) Anchor

In January 2023, Duoduo Live launched the "New Superstar Program" to recruit mature anchors from other platforms to settle in. In the plan, operators who already have stores in Duoduo or live broadcast stores outside the station can get traffic rewards ranging from 10,000 to 20,000 yuan as long as they participate in the plan.

In addition, Toto Live also launched the "Bole Project" and "Million Anchor Challenge". Among them, the KDU plan stipulates that regardless of service providers or merchants, every successful host invited to start broadcasting can receive 300 yuan of advertising promotion red envelope rewards. The Million Anchor Challenge is a competition reward activity set up by the platform to encourage anchors to actively participate in live broadcasting. The event stipulates that anchors who have reached a certain level of total turnover in the past 30 days in live broadcasts have the opportunity to receive up to 300,000 yuan of advertising red envelope rewards given by the platform every month.

(2) Service providers

After 618 in 2023, Duoduo Live will introduce service providers on a large scale in key industrial belts such as the Yangtze River Delta, Pearl River Delta, Huanjing, and Chengdu-Chongqing, and provide one-to-one services to merchant anchors to comprehensively improve the operational capabilities of merchants.

The threshold for service providers to settle in has been greatly relaxed, stipulating that any type of service provider can enter as long as it has a compliant business license, without any deposit, and there are no regional and category restrictions. Common live broadcast venue operators, cloud warehouse service providers, MCN institutions, advertising service providers and other entities in the market can become many live broadcast service providers.

In terms of organizational structure, Duoduo Video is in charge of Qiu Bai (flower name), who used to work for Douyin and joined Pinduoduo around 2021. Initially, Pinduoduo's short video and live broadcast services were scattered in various industry categories, and each industry category was equipped with certain personnel to operate, and the category leader was in charge.

Since 2022, in response to the impact of short video platforms such as Douyin, Pinduoduo has begun to consolidate and manage the scattered live broadcast and short video business, internally calling this business "Video View" and codenamed "VV".

According to a Pinduoduo insider, Pinduoduo is responsible for the live broadcast and short video team, including product, operation, and design, with a total of 50-60 people. At present, the team has two main assessment indicators: one is daily activity to ensure the traffic of the tab of "Duoduo Video"; The second is the transaction scale.

(3) Pinduoduo content battlefield timeline

· 2018: Pinduoduo began to encourage merchants and factories to sell goods live;

· 2019: At the end of November, "Duoduo Live" began internal testing of WeChat mini programs; Subsequently, Pinduoduo App took "tens of billions of brand subsidies" as the entrance to start its live broadcast debut in a low-key manner;

· 2020: The live page was added for the first time in January; In February, Toto video was added for the first time; In September, the homepage launched a unified live broadcast portal; (In the second half of 2020, Pinduoduo had planned to add a live broadcast division, led by co-founder Lu Juanjun, but the plan failed to land because the live broadcast business performance did not meet expectations.) Since then, Pinduoduo's content-based business has been silent for a while)

· 2021: In May, Duoduo Video became a first-level entrance, and some users were tested internally;

· 2022: In February, Duoduo Video was officially launched at the first-level entrance.

Six

Once an e-commerce platform is born, it is destined to fight for traffic

The two e-commerce platforms, Taojie E-commerce and Pinduoduo, which were born in different eras, initially chose different methods, but in the end, their traffic transfusion methods were the same.

Pinduoduo relied on WeChat ecological drainage in the early stage, and relied on tens of billions of subsidies in the medium term to buy off-site traffic at low prices + off-site purchase traffic, and its only content entrance "Duoduo Video" has become a new drainage method.

Taojie's content attempts have been protracted and ubiquitous. In the early days, relying on all-encompassing "omnipotence", relying on gods and people, divine shops, and divine objects; Since then, in order to realize the closed loop of planting grass in the station - transaction, he has tried grass planting projects such as Yangtao, live broadcast, shopping, and dotting shopping, but the effect is limited.

For a long time, relying on Internet celebrities with their own traffic + off-site purchasing mode to drain traffic to the site; Until last year, the contentization of Taobao e-commerce was still a grass logic, but when the indicators of Taobao Live and homepage guess you like short videos began to change, emphasizing "content" indicators such as duration and interaction rather than conversion indicators, Taobao e-commerce also began to believe in "traffic-based video".

Author | Wu Lingwei is the chief content analyst of Yicai Business School