How did Pinduoduo achieve 600 million users in 5 years?

With continuous “10 billion compensation” and nearly 600 million users, Pinduoduo has created a new road from Ali and Jingdong.On the evening of March 11, Pinduoduo announced its 2019 annual results, and the financial report showed that the company’s revenue reached 301.400 million yuan, up from 131 in 2018.US $ 2 trillion increased by 130%; under US GAAP, net profit attributable to shareholders of common stock decreased by 69.68 ppm, the previous 2018 annual budget of 10.3 billion was substantially narrowed.In the financial report conference call, Huang Zheng, Chairman and CEO of Pinduoduo, said that the interference caused by the epidemic will have an impact on the company’s first quarter 2020 performance, but Pinduoduo’s long-term expectations remain unchanged.He believes that the epidemic allows more users to complete consumption through the Internet, including the purchase of agricultural products, and plans to continue to “invest” in users this year.No reduction in marketing costs Increase the number of users lead the e-commerce industry Pinduoduo is still replacing the most important thing is the high marketing costs.In the fourth quarter of 2019, Pinduoduo’s sales and marketing expenses reached 92.7 trillion, with a cumulative cost of 271 in advance.7 ten percent, an annual increase of 102.2%, which is close to the company’s long-term revenue, of which the “tens of billions of compensation” plan is the main driving force for the increase in the cost.Huang Zheng said that the company plans to continue to invest in user participation throughout 2020 and remains optimistic about the rapid growth and innovation in the new year.Stimulated by the “10 billion subsidies”, Pinduoduo ‘s user growth is still the top e-commerce industry in 2019—gradually in 2019, Pinduoduo ‘s annual number of active buyers reaches 5.85.2 billion, a net increase of 48.9 million in a single quarter, a net increase of 1 compared with 2018.67 billion.Following the current growth momentum, Pinduoduo will have the opportunity to catch up with the size of the main segment by the end of this year, but through the expansion of user scale, Huang Zheng believes that it is meaningless to discuss users in low-tier cities and first-tier and second-tier cities separately.He believes that this discussion will point to all players in the e-commerce industry, and that consumer behavior will change in the next two years.Although it has nearly 600 million users, Pinduoduo ‘s average revenue per user is only one-seventh to one-eighth of Ali ‘s. Huang Zheng believes that the increase in this number is only a matter of time. “Please do n’t overestimate our growth rate., But do n’t underestimate our potential in the long run.GMV breaks the trillion-dollar agricultural product upside effect for the first time. It clearly summarizes the 2019 results. The biggest achievement of Pinduoduo is to reach a trillion-dollar GMV, which sets a new record for the global e-commerce industry to realize trillion GMV transactions.It took less than 5 years, while Ali and JD.com took 14 years and 20 years respectively.The key players that contributed to this trillion GMV include Pinduoduo’s new brand plan and agricultural products going up.According to the data disclosed by Jiuding, the vice president of Pinduo Strategy, on the conference call, there were more than 900 companies participating in the new brand plan last year, involving 20 categories, 2,200 custom SKUs, and cumulative orders exceeding 1.5 billion.The upward trend of agricultural products brought GMV of up to US $ 136 billion, an annual increase of 109%, accounting for 13% of the overall GMV of Pinduoduo.5%.Jiuding said that last year, there were 58 agricultural merchants in Pinduoduo.60,000 households, and 2.With 400 million active users, the repurchase rate exceeds 70%.However, the main GMV components of Pinduoduo are still clothing and FMCG, which account for about 50% of the overall GMV.Jiuding said that the growth of GMV last year was mainly due to the annual expenditure growth of active buyers.The financial report shows that Pinduoduo spent 1720 per active buyer last year.1 yuan, an increase of 53% a year.Changes in the epidemic affect the first-quarter report. Huang Zheng weighs without changing the scheduled target. In the release of the financial report, Pinduoduo did not happen this first quarter performance forecast. Huang Zheng said that the new crown epidemic disease may have an impact on the business.”Many products were sold out on our platform and could not be replenished in time. Some products also experienced delays in delivery and simply failed to deliver.”Actually, I want to point out that Pinduoduo has always been a fast-growing platform, so any setback will not change our view of the possibility of this year.Affected by the epidemic, Pinduoduo provided subsidies to users and merchants in the first quarter. Among them, “10 billion subsidies” turned to medical treatment, protection and other categories.As of February 1, Pinduoduo provided RMB 600 million in subsidies to more than 80 million orders to stabilize the price of protective materials.For some merchants, Pinduoduo spent more than RMB 1 billion to provide a subsidy of RMB 2 to 4 per order for merchants who added orders during the epidemic.Huang Zheng said that after various industries in China began to resume work, Pinduoduo saw the demand for different categories begin to recover. He took an event in February as an example, saying that Pinduoduo sold 20,000 MAC lipsticks and 5Ten thousand iPhones.Reporter Lu Yifu edited Xu Chao proofreading Wang Xin