Source | Dongge interprets e-commerce
Author | Li Chengdong, Jin Shan
Sacrificing short-term profits for the sake of long-term development and the interests of consumers.
In the past, Pinduoduo's performance far exceeded the growth of the industry and accelerated wildly, but now the emergence of the "10 billion reduction" policy reveals a different signal. Pinduoduo has slowed down.
In the previous performance call, the management of Pinduoduo has clarified the way of "support and governance", improved ecological construction, and is ready for long-term investment.
On September 9, Pinduoduo's "10 billion reduction" plan launched a new policy, and the logistics transfer fee in remote areas is borne by the platform, which has now covered all merchants on the platform. In just one month, Pinduoduo has successively launched a package of policies to support merchants.
No repurchase and no dividends, but it is still necessary to take out tens of billions of resources to subsidize businesses. Behind the introduction of these policies, it is equivalent to Pinduoduo temporarily sacrificing the revenue source of commissions and advertising.
From running to jogging, why has Pinduoduo changed?
Cut to yourself, the merchant version of the "10 billion subsidy"
The most ruthless slash at himself, Pinduoduo took the initiative to slow down.
Pinduoduo Chen Lei said on the occasion of the release of the financial report that it will improve the ecological construction through the simultaneous development of "support and governance", and will invest tens of billions of resources to support new quality businesses in the next year, and resolutely carry out business ecological governance. Pinduoduo has clear rewards and punishments.
In terms of support, Pinduoduo released tens of billions of resources to appease businesses.
You know, Pinduoduo's model is simple, and the only sources of income are commissions and advertising. The policy package now being introduced amounts to an outright forsaking of short-term growth.
Consumers have their own tens of billions of subsidies, and now Pinduoduo has released dividends, and merchants also have their own "tens of billions of reductions".
First of all, in terms of commissions, optimize unreasonable transaction links and reduce the operating costs of merchants.
The basic service fee is one of the fees charged by major e-commerce platforms. In the past, as long as there was an order, regardless of whether the final consumer refunded or not, whether the goods were finally shipped, the platform actually paid the cost of technology and traffic, so this fee would be deducted. Now, after the user initiates a refund, Pinduoduo chooses to refund the service fee of the merchant's order, setting an example in the e-commerce platform.
On August 13th, Pinduoduo launched a refundable right of technical service fee to merchants who signed up to participate in the station's resource activities, and all orders that participated in tens of billions of subsidies, seckill, platform promotions, 9 pieces of 9 special sales, trendy good prices, multi-person groups and other on-site activities generated by the order, after the user initiated a refund, the platform will return 1% of the basic technical service fee for the first use and then pay for the order, and 0.6% of the basic technical service fee for other orders.
Subsequently, Pinduoduo upgraded the "technical service fee refund rights", and the rate of technical service fees for orders generated by merchants' participation in resource slot activities was reduced from 1% to 0.6% in addition to enjoying the service fee refund rights.
Secondly, the dividend release is also carried out in advertising. The return rate of the e-commerce industry as a whole is increasing, and some of the advertising investment of merchants has been wasted. Pinduoduo has also made improvements to reduce unnecessary operating costs for merchants for fully refunded orders before delivery.
At the end of August, Pinduoduo's "promotion service fee refund rights" launched to merchants have also officially taken effect, and the platform will automatically return the promotion red envelope corresponding to the amount of the merchant's promotion software service fee for consumers who make a full refund before delivery, and there is no need for the merchant to initiate an appeal.
Pinduoduo is also simplifying the business threshold for merchants, which is reflected in the security deposit, after-sales and logistics.
On September 5, Pinduoduo's latest merchant notice showed that the basic deposit of merchant stores will be reduced from 1,000 yuan to 500 yuan, and the initialization margin of newly settled individual stores and enterprise stores will also be reduced to 500 yuan.
Even the after-sales problem, which has been controversial, Pinduoduo has also made improvements and relaxed the appeal conditions for some abnormal orders.
In order to further optimize the experience of merchants, Pinduoduo has also upgraded the after-sales service system of merchants, opened a green channel, and established a special after-sales service team to fully support merchants to appeal abnormal orders, malicious complaint orders, and negative consumer experience orders.
At the same time, Pinduoduo limits the number of times it can be appealed. As long as the merchant has questions about the after-sales treatment, he can file an appeal with the platform.
The cost of logistics in remote areas is also a headache for merchants, especially after the centralized order, the cost of sending from the transit warehouse to the destination is higher. On September 9, Pinduoduo's "10 billion reduction" was launched again, and all transit orders in remote areas generated from now on, merchants only need to send the orders to the transit warehouse, and the logistics transit fee for the second delivery of the transit warehouse to remote areas will be borne by Pinduoduo.
The rewards and punishments are clear, and Pinduoduo has also invested in governance. Pinduoduo's R&D investment in Q2 reached 2.9 billion yuan, a year-on-year increase of 6%.
Zhao Jiazhen, co-CEO of Pinduoduo, introduced that in order to further strengthen the ecological governance of merchants, the platform optimizes the process of merchant entry and product listing, and conducts active inspections of the products that have been put on the shelves through technical means, and then combines the regulatory team to conduct a refined review to crack down on illegal cheating merchants and create a better business environment for high-quality merchants.
In the past, Pinduoduo's ecology was more about handing over the right of supervision to consumers. "Refund only" is equivalent to imposing a fine on the consumer and hiring the buyer to monitor the quality of the product. Now Pinduoduo intervenes from the perspective of the platform to actively guide merchants to improve the quality of goods and increase the supply of high-quality merchants.
With strong support and supervision, the slowdown in performance is more like Pinduoduo's active choice. From running wild to seeking stability, what is Pinduoduo slowing down for?
To do quality cost performance, Pinduoduo bets on "new quality productivity"
Pinduoduo bluntly said that the era of high-speed growth in the past is over, and from revenue to profit, future growth will slow down. In the context of the high-quality development of e-commerce, where is the future growth space of Pinduoduo, which seeks stability?
Under the current competitive trend, e-commerce seems to say goodbye to price wars as a whole. Taobao proposed to weaken the strategy of absolute low price, and the traffic returned to GMV allocation. Douyin no longer puts "price power" at the end, and focuses on the pursuit of GMV growth.
In the era when consumers tend to be rational, the demand for cost performance will not disappear. But now e-commerce is returning to its own differentiated advantages. At the same time, the demand of the sinking market is also changing, and the quality requirements of "consumption upgrading" are increasing.
For Pinduoduo, it is to make the advantages of "cost performance" deeper and more thorough. According to reports, Pinduoduo's annual active merchants are around 12 million, and the top merchants are stable. To do quality cost performance and provide high-quality supply is to combine from the industrial belt.
The Maozhou Herbal Tea Industrial Belt is a clear example of this. In the past five years, the number of flower and plant enterprises and businesses in the state has increased to 5,000, and the number of employees has increased by more than 30 times. Driven by Pinduoduo's e-commerce dividends, it has completed the transformation and upgrading of other industries for 30 years in five years.
The original herbal tea was only primary processing, combining wolfberry, peony and other products, and the threshold was not high. This has also led to extremely fierce competition for the products of Millizhou flowers and plants. Many businesses in the industrial belt have begun to launch new products, and the "big-name replacement" model has been welcomed by many consumers.
Last year, a jasmine tea exploded, and merchants in the industrial belt of Maozhou decisively chose to follow up and launched the same model with similar taste and higher quality. The price is only one-tenth of the original, and the sales in Pinduoduo exceeded 1 million yuan in two months.
Because it has its own factory, there is no need to invest in the stream, and agricultural products are commission-free, so the final gross profit of this jasmine bag tea is 15%, which is higher than the profit of the regular model.
Source: Internet
After earning the first pot of gold, many merchants in millizhou began to try to make solid drinks with a higher threshold, such as sour plum soup and milk tea flat. Millizhou herbal tea has moved from the combined processing of primary agricultural products to the industrial upgrading driven by technology.
Also driven by e-commerce are the transformation of Pinghe eyelashes, Xianju bayberry, Yangshan peach, Donghai wearable A and other industrial belt categories.
For businesses in the industrial belt, there is no shortage of high-quality and low-cost goods. However, the operation threshold of e-commerce is high, and merchants lack operational experience and streaming costs.
Pinduoduo does not have its own traffic bias and the principle of decentralized traffic distribution. This also makes Pinduoduo merchants extremely efficient in matching goods. Whether it is a brand or a white-label seller, the competitiveness of the product is the key to determining the traffic allocation.
In 2022, Pinduoduo launched the "site-wide promotion" advertising tool, where merchants can buy all the traffic. It is understood that before the launch of the whole site promotion, only 20% of Pinduoduo's on-site traffic could be traded. Reduce the cost of streaming and improve the ROI.
There is no need to invest in the flow, there is no deduction point for agricultural products, and Pinduoduo's commodity price advantage can be amplified. The price of the same product on the Pinduoduo platform is lower.
In the competition of e-commerce at low prices, Pinduoduo's industrial belt merchants provide another more cost-effective sample to do healthier. Businesses in the industrial belt can not only achieve cost performance, but also ensure profit margins.
In the past, due to the inland, Pingdu and other industrial belts were located in the inland and paid more attention to production, which relatively missed the dividends of early foreign trade and e-commerce development. It has taken five or six years to go through the development process of other coastal industrial belts for more than 30 years.
While consolidating its own cost-effective advantages, Pinduoduo has also provided assistance for the transformation of the industrial belt.
Hibernation, low-key penance and internal strength
Pinduoduo has repeatedly exceeded expectations over the past few quarters. Short-term performance can only reflect past achievements, and Pinduoduo has taken the initiative to slow down and invest resources in future development. Sacrifice short-term profits to prepare for long-term investment.
A healthy and perfect ecology can resist potential uncertainties and risks under the current situation of consumption differentiation and changes in consumption structure.
Under the e-commerce price war, the most miserable thing is the involuted merchants.
Pinduoduo's "10 billion reduction" policy is also benefiting the people, and the essence is still for consumers. Treat merchants well, reduce the operating costs of merchants, and merchants have more motivation and space to provide more cost-effective goods with better services.
The demand for rational consumption is long-term, and Pinduoduo starts from the perspective of the platform, releases dividends, and sacrifices short-term profits to support businesses, which is also to form a benign ecology. In the uncertain environment of the future, Pinduoduo will also have a more long-term competitiveness. In contrast, stock price movements and short-term competition are secondary.
As Pinduoduo previously mentioned in an internal letter in 2018, "we must embrace the supervision of the public and competition, ignore the fluctuation of stock prices, take out the spirit of nailing, and solve practical problems one by one." "Be consumer-oriented, not competition-oriented. ”
Pinduoduo entered a dormant period and cultivated its internal skills in a low-key manner. Build high walls, accumulate grain, and slowly become kings. With one hand support, one hand governance, invest tens of billions of resources, and wait for the next prosperous period.