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Source: adjacent chapter (ID: tmt317)
Pinduoduo’s situation is becoming more and more difficult.
On the one hand, the lack of business driving force and slowing down of growth rate have been revealed in the financial report released in August, and the market is worried about pinduoduo’s sustainable development ability; on the other hand, the industry giants represented by Ali, Jingdong, Suning and meituan have also begun to make efforts to the sinking market on which pinduoduo relies, especially the Taobao special edition of Alibaba’s new business, which is “more fragrant with one yuan” “Festival” and pinduoduo’s core competitiveness are facing each other.
What’s more, the boycott of brands such as Dyson and Tencent switch and the distance of white brand manufacturers are making pinduoduo more and more friendless.
The market has its own rectifying mechanism. When the market forces rapidly extend to pinduoduo in the form of hunting by all parties, can pinduoduo still make more efforts?
Internal worries remain unsolved
1. The leverage effect of marketing expenses was weakened, and ARPU value was almost unchanged
In August, pinduoduo released the company’s financial report for the second quarter of fiscal year 2020. From the data, the net profit attributable to ordinary shareholders was – 899 million yuan, an increase of 10.36%; the operating revenue was 1.2193 billion yuan, with a year-on-year growth of 67.26%; the number of active buyers of the platform increased by 55.1 million, and the number of active users increased by 81.4 million.
On the surface, this is not a bad quarterly earnings report, but reflected in the stock price, the stock price fell by more than 10% before multi market.
The reasons are as follows: Zhihu user’s “materialist research dog” analysis found that:
First, although the subsidies of pinduoduo in Q2 did not decrease, the leverage effect of marketing expenses did not show (Gmv driven by unit marketing expenses, Q1 was 42 yuan, Q2 was only 38 yuan), and the profit situation was not as good as the book.
Second, when the user growth is close to the ceiling, the promotion of ARPU value is the core driving force of Gmv growth. However, the problem revealed in pinduoduo’s Q2 quarter was that the ARPU value of pinduoduo Q1 was almost no increase compared with that of pinduoduo Q1, while the ARPU value of Q2 was 1857 yuan.
This allows the industry to greatly slow down the growth rate of Gmv in pinduoduo, with the expectation of looking down. Or it is the superposition of these two factors that the sharp drop of stock price before the Q2 financial offer has sounded the alarm of the industry on the future sustainable development ability of pinduoduo.
2. Big brands love to build and ignore. It’s a long way to go to win more brands and break the circle
Here, in fact, it also leads to a big problem that pinduoduo is currently facing in the brand – it is still unable to tear off the label of “medium and low-end e-commerce platform”, and it is difficult for the brand to break the circle upward.
After the consumption of Tesla brand farce, I am afraid that the big brands who are not willing to have much relationship with pinduoduo will have more resentment and vigilance against pinduoduo.
Before that, in fact, we have seen the indifferent attitude towards pinduoduo’s subsidy activities, such as Dyson, Hailan puzzle, AMD, Teso, Cadillac, three squirrels, and Tencent, which acts as the agent of switch. Even AMD and Cadillac directly choked on them. This shows the dilemma of pinduoduo brand breaking through the circle and developing upward.
However, the paradox of the problem is that category expansion and the increase of customer price are the key measures to improve ARPU value, but the indifference of big brands to pinduoduo makes pinduoduo fall into a strange circle.
Of course, we also see the efforts of pinduoduo, such as its continuous use of 10 billion subsidy strategy, trying to attract high consumption users on the one hand, and reduce the operating costs of brand merchants on the other hand, in order to achieve a positive cycle between user retention and brand product expansion, thus bringing about the improvement of ARPU value of users.
However, judging from the fact that the ARPU value of pinduoduo users in the current financial report has increased month by month, it seems that pinduoduo has not built such an ideal positive cycle. There is still a long way to go for the road of big brand.
3. The comprehensive strength is still lacking, and the construction of China and Taiwan still needs a long time
In reality, although pinduoduo has created many miracles in the market, there is no doubt that pinduoduo is still a “new comer” in the market. This makes it possible for it to achieve sustainable development in a strong competitive market by relying solely on social games and subsidizing horse racing and enclosure. It also needs the improvement of core technology and comprehensive ability.
Previously, Guojin Securities pointed out in the research report that “pinduoduo, as an e-commerce platform, connects a large number of C-end users and b-end merchants. Its long-term sustainable development needs to be realized based on its own external enabling export, and continuously” improving upstream efficiency and downstream experience “to strengthen the practice of platform empowerment, so as to improve the efficiency of empowerment. In the long run, this kind of external empowerment needs the support of powerful enterprises. ”
However, Guojin securities’s view on the progress of pinduoduo’s Zhongtai construction is that the current pinduoduo Zhongtai construction is still in a very early stage, and it believes that the whole process of pinduoduo’s Zhongtai transformation is expected to last 3-5 years.
Such a construction time requirement, on the one hand, reflects the difficulty of building a medium platform, on the other hand, it also reflects the slightly lack of pinduoduo’s core strength in technology empowerment for businesses.
These can be seen as pinduoduo’s internal worries.
A surprise attack by a strong enemy
However, the market is not static, especially the e-commerce market in a strong competitive environment.
If you look at the e-commerce market, you can find that there are Taobao special edition, juhuasuan, Jingxi, Suning, meituan and other competitors are eyeing the sinking market of e-commerce. What’s more, the market competition has always been “killing you while you are ill”.
As we can see: when pinduoduo’s current Gmv growth rate is slightly sluggish, its competitors are more active in launching price competition, actively attacking the hinterland of pinduoduo and competing for users.
For example, Taobao, which is backed by the comprehensive empowerment of Ali group, launched the “1 yuan more fragrant Festival” on September 23, under the successful opportunity of adding 1 million buyers in a single day in the “1 yuan special zone” in June. It announced that since October 10, it will jointly launch more than one million high-quality factory goods with one million factories, creating the biggest shopping carnival season in the sinking market.
In response, qigong, vice president of Alibaba and general manager of Taobao c2m business department, said: “Taobao special price version will continue to increase factory subsidies. In front of consumers, there is no” true fragrance “, only” more fragrant “.
Taobao special edition of this move, can be said to be benchmarking means obvious.
After all, pinduoduo also invested 100 million yuan in July to create “Zhenxiang Festival”, and Taobao’s special edition chose to launch “1 yuan more fragrant Festival” on October 10, the festival’s intention is self-evident.
In reality, Taobao’s special edition, which is backed by the whole Alibaba group, has already become the most difficult opponent for pinduoduo. This can be seen from the extremely rapid development trend it has shown – 40 million monthly active users have been online for more than 90 days; Within 100 days of its launch, 145 industrial belts, 1.2 million industrial belt merchants, 500000 foreign trade merchants and more than 300000 foreign trade factories have gathered in China, becoming the largest domestic sales platform for industrial belt merchants, which has set off a wave of “scrapping and entering special” businesses.
Today, Taobao special edition takes a more active attitude, launching an active attack on pinduoduo’s “low price” core competitiveness, which will inevitably bring great pressure to pinduoduo, so that the “abandoning Pinpin in special” will be repeated at the user end.
Why is that?
In this regard, the view of Puyin international personally thinks that it can explain the problem very well. It points out that the Taobao special price edition backed by Ali can make use of its huge user data, cloud computing services, and combine the financial services of Alibaba supply chain and ant group, which can effectively improve the operation efficiency and reduce the operating costs of the factory, and attract more customers with its cost advantage.
At the end:
On the surface, the challenges pinduoduo is facing are the result of the combination of the pains of development stages and the further efforts of competitors in the sinking market. However, from a deeper point of view, it is not difficult to find that this is actually the active correction ability of the market, which makes the market from disorder to order, from multi-party confrontation to multi win-win situation.
We can see that: in the past, pinduoduo has won a large number of original users by social marketing, burning money and subsidizing under the strong flow support of wechat. However, the rapid development of pinduoduo has failed to keep up with the development of users’ demand in terms of product quality and back-end service ability, which is related to user experience and stickiness. Of course, this will lead to users’ actual experience Experience gap, and the hunting of external competitors intensifies the speed of users’ awakening to quality and service, which makes users turn to other e-commerce platforms with low price characteristics but better product quality and experience.
Therefore, through the current challenges of pinduoduo, we can find the market’s active correction ability. It is leading the sinking e-commerce market, which used to be low-cost and ignored product quality and user experience, to fully empower businesses with comprehensive strength, and effectively improve efficiency, so as to achieve a win-win development path of commodity quality and user experience.
(statement: This article only represents the author’s point of view, not Sina’s position.)