59 han zheng 2019 users pay small refundable entry

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© Han Zheng, 2019
• Users pay small refundable entry fee
(0.01 RMB) to take part
• Customer needs to invite 5 friends for
chance to win product for 0.01 RMB
Pinduoduo‘s core mechanisms (part 1)
GROUP BUYING
BARGAINING
Get discounted group-buying price:
• invite friends on social networks,
• join an existing team purchase,
• or initiate a new team purchase
Group-
buying
price
Original
price
Join
existing
groups
• Share product with friends and ask them
to help bargain for cheaper price
• Each time friend helps bargaining, the
price decreases until it hits 0
LOTTERIES
Bargained
price
Original
price
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© Han Zheng, 2019
Games to receive objects for discounts
• Watering a tree to get a fruit
• Accomplish multiple tasks to get gold
• Omnipresence of timers
• Number of people who already bought the
product
• Spontaneous flash sales and coupons
with short duration
Pinduoduo‘s core mechanisms (part 2)
PRESSURE
GAMES LEADERBOARD
• Ranking of users who made the most
money out of inviting friends
• Top user made 2,940 RMB from sharing
with 290 friends
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How Pinduoduo is different from its competitors
• More impulse buys
• Increased customer retention
 Encourages users to check in regularly
 Establishes platform communities
• Lower entry barrier due to integration as Mini program within WeChat
• Lower cost of user acquisition
• Easy mobile payment via WeChat Pay
• Strong focus on niche market segment neglected by competitors
• User behavior oriented (all about good deals)
• Using customers as platform ambassadors
• Leverage social capital (trust) of coustomers‘s social network
• Low customer acquisition costs
Leverage users‘
social networks
High degree of
gamification and
entertainment
Leverage
WeChat ressources
Niche market
DIFFERENTIATING FACTOR
COMPETITIVE ADVANTAGE
A reloaded online group-buying model with smart usage of viral marketing measures and
strong leverage of psychological effects on consumers

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Agenda
Conclusion 7

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How branding has changed in the digital world
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Source: Anand Narasimha
One-way message through
advertising and PR in mass media
Creating brand differentiation
Mass consumers (one-to-many)
Limited market research
Conveying brand proposition
Awareness and image creation
Interactive content through paid,
owned and earned platforms
Creating brand relevance
Prosumers (one-to-one)
Real-time customer analytics
Activating brand conversations
Search generation and content
engagement
MESSAGING
FOCUS
TARGETING
KEY METRICS
TASK
KEY OUTCOME
Conventional branding Digital branding
Conventional branding and digital branding need to be integrated seamlessly to build
brands in modern markets

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Enhancing the customer experience by blending digital with physical
VR/AR
IoT
AI
Analytics
Customer
journey
Digital
engagement
Virtual engagement
& configuration
Cross-channel
assistance
Individualized
welcome
Personalized driving
experience
Exclusive &
customer offer
Ongoing engagement
prior to handover
Enhanced experience
through in-car assistance
Connected
service
Smart repair
Brand
advocacy
Example: Car dealer