From Taobao intern to the father of Pinduoduo

Chapter 164 Pinduoduo's Monthly Active Users Reach 140 Million

Chapter 164 Pinduoduo's Monthly Active Users Reach 140 Million

Pinduoduo headquarters.

Lu Hai entered the office with a serious expression and found Lin Mu, saying, "Lin Mu, you need to be careful. Alibaba has its eyes on us. They've been sending out a lot of job offers to our employees privately, with salary increases generally ranging from 20% to 30%."

Lin Mu said, "In a sense, this is a good thing. It shows that Alibaba is seriously considering us as competitors. I also received an invitation from them, saying they want to spend 5 million yuan to acquire Pinduoduo."

Lin Mu continued, "Here's what we'll do: call everyone to the conference room for a meeting. This kind of thing happened right after the New Year; it's time to get everyone on the same page."

After Lu Hai left, Lin Mu looked at Pinduoduo's data for February: Pinduoduo's monthly active users successfully reached 1.4 million, with an average spending of 200 yuan per person, resulting in a monthly turnover of 280 million yuan.

Furthermore, starting in February, Pinduoduo officially began charging fees, and the ratio of transaction volume to revenue was not good, only 1%, meaning that 280 million yuan in transaction volume was converted into 2.8 million yuan in monthly revenue.

With monthly revenue of 280 million, the net profit margin was 0, and they even owed more than 700 million.

This is because labor costs, bandwidth costs, data center construction costs, and subsidy costs are too high.

But this is a good start, because it shows that the money can still be collected.

While a 1% turnover ratio is terrible, during this period, apart from JD.com, the overall turnover ratios of major e-commerce platforms were not good either. Taobao, for example, could only barely maintain one-fiftieth.

Taobao's higher fees compared to Pinduoduo are due to its higher transaction fees and additional Google income.

Pinduoduo hasn't enabled Google Play yet, mainly due to its scale. Once Pinduoduo's scale expands tenfold and its monthly active users reach tens of millions, the revenue-to-volume ratio will likely reach 50:1 or even 40:1, at which point its monthly revenue will be close to 60 million.

By then, Pinduoduo will be less reliant on financing and will be able to generate its own revenue to survive the most dangerous early stages.

Some time later, in the conference room, Lin Mu was speaking eloquently through his PowerPoint presentation.

In general, it's all about making empty promises: the future is bright, there's a promising future, Alibaba is evil, and they're lying to you.

Few employees were poached in this wave of recruitment. This tactic is something that seasoned internet veterans, aside from newbies, have seen countless times.

They lure you with a high salary to switch jobs to a competitor; once you actually switch, they'll fire you after only a few months, citing reasons such as failing to meet your KPIs.

This is where you're in an awkward situation: neither new nor old companies want you, and your resume is now tainted.

After the meeting, Jiang Fan came to me and said in a joking tone, "President Lin, Alibaba really went all out. They gave me one percent of the stock options in JuTuanGou Company, allowing me to transfer there as a senior executive."

This time, Lin Mu was genuinely anxious. Jiang Fan was truly a talent; he had made a significant contribution to the free fruit delivery strategy, his big data-driven approach greatly aiding logistics. And most importantly, Lin Mu knew all too well the power that Jiang Fan and Taobao could unleash together.

Taobao's mobile transformation is still going through a bumpy road.

Lin Mu said, "Jiang Fan, don't be fooled. There's no future in joining a group-buying team. I've heard that corruption is rampant there."

"Do you remember Zhang Qiang from the initial outsourcing team? He's now in charge of marketing at JuTuanGou, and he's even a director. What's the difference between that and a mouse in a rice granary?"

Jiang Fan said, "President Lin, that's not what I meant."

A while ago, Lin Mu temporarily left Pinduoduo and asked Jiang Fan to manage it on his behalf, which touched Jiang Fan quite a bit.

He didn't think he would receive this treatment if he joined Taobao.

He said, "Mr. Lin, I think group buying is a great business opportunity and very suitable for Pinduoduo. Should we start a new product line and offer group buying?"

Lin Mu's eyes lit up; that wasn't a bad idea.

In later years, Pinduoduo successfully launched a group-buying event with 10 participants and 10 orders. By securing a large number of confirmed orders, Pinduoduo negotiated a very low price for the products and successfully expanded the event's reach, achieving a win-win situation.

Although Pinduoduo is not that big now, it can still organize group buying with a thousand people and a thousand orders, or even group buying with ten thousand people and ten thousand orders.

Furthermore, Pinduoduo is now facing a dilemma: the public's impression of Pinduoduo is that the things sold on it are very cheap, and they are all cheap goods; if they want to buy genuine brand-name products, they still have to go to Taobao, JD.com or Vancl.

Lin Mu said, "Jiang Fan, your suggestion is excellent. Here's my idea." He briefly explained that he wanted to organize a group-buying event with a thousand or ten thousand participants, and the brands he would sell would be slow-moving stock from major brands, such as Hongxing Erke.

Brands like Li Ning, Anta, and Uniqlo.

Lin Mu instructed, "Chen Ping from the marketing department can handle the negotiations and communication in this area. Wang Zaixing is unavailable right now, so you will be responsible for technical and data support."

"Oh, right, I have another idea," Lin Mu said, slapping his forehead. "I plan to launch a new product line called '1 Yuan Flash Sale'."

Jiang Fan frowned; this sounded similar to the 1-yuan flash sale product. He continued listening to Lin Mu.

Lin Mu spoke eloquently: "For the 1-yuan flash sale product line, we only sell genuine branded goods, and its product logic is consistent with..."

"This is completely different from a flash sale."

"For example, I would put an iPhone 5 in the 1-yuan flash sale section, and users would have a chance to buy it for just 1 yuan."

"If only one user tries to buy the phone, then the phone is 100% theirs; if 10000 users participate in the purchase, then the probability of that user getting it is 1/1."

Lin Mu continued, "I have three purposes for creating this product line."

"First, user acquisition. This product line is like a soft gamble; it can be very effective at attracting users."

"Secondly, every single product on there was purchased by Pinduoduo itself. We can use marketing to break the impression that Pinduoduo is full of generic brands."

"For example, Apple would never join Pinduoduo, but we can buy Apple phones out of our own pockets and give them to users as a benefit. In this way, we can successfully bypass the step of persuading Apple to join Pinduoduo."

"Third, we can retain users who participate in soft gambling. If a user spends money but fails to purchase the item, we will not refund the money, but we can give them a free 5 yuan no-minimum-spend coupon as a consolation prize to encourage them to get a free item on Pinduoduo."

Jiang Fan tentatively asked, "President Lin, should we impose a limit on the amount users can spend on items during the flash sale? For example, if a user can participate in the flash sale for an Apple phone with just 1 yuan, what happens if they place 1000 bets?"

Lin Mu said with a serious expression, "Absolutely not! Each person can only invest one yuan per item. And I can tell you right now that this is a separate business line. Once it grows big, I plan to spin it off from Pinduoduo and eventually sell it off."

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