The reasons and solutions for the second phase of the interruption of Pinduoduo's through train

"What is the solution to the interruption of Pinduoduo's through train traffic? Strategies are being explored to find a breakthrough." In Pinduoduo's e-commerce operations, the interruption of the through train traffic in the second stage has become a thorny problem. What is the reason? And how to deal with it?

Is Pinduoduo's through train very simple? Compared with other e-commerce platforms, it is already very simple. When operating Pinduoduo, we only need to set a through train bid, and we don't need to worry about anything else. It is really a fool-proof operation. Even a Pinduoduo novice can become a driving god.

Having said that, the above is just pure theory and imagination. The reality is that although Pinduoduo's through train is very simple, all e-commerce giants are facing a very tricky problem right now: the second stage of traffic interruption.

If you want to make money in e-commerce, you must have a certain amount of orders. If you run 20 orders in the first stage and then the flow is cut off, no one can make a lot of money. At present, the situation of the second stage of flow is getting worse and worse. Let me put it this way, when I encountered the second stage of flow cut off before, I only needed to move my hands and adjust the second stage bid to the actual transaction cost of the first stage, so that I could take over the traffic of the first stage, so that the second stage could continue to flow and take off smoothly.

Now, this method no longer works. No matter how low the price I offer in the second stage, there is just no traffic. How can I continue to do this?

01Reasons for the Second Stage of Interruption

Any phenomenon has its reasons behind it, so I started to study why the same operation method has completely different effects before and after. Combining the current market and platform changes, I roughly guessed the reason. The following is just my personal guess. If I guessed it right, it would be a coincidence. If I guessed it wrong, you can just treat it as a topic of conversation after dinner.

Whenever there is a traffic interruption in the second stage, the fundamental reason is that the link weight is not enough to take over the traffic in the first stage. Just like before, you could take over by simply lowering the bid, why can't you take over now? It's because the link weight brought by raising the ad bid is not enough to bring you orders.

In other words, if you want to have continuous traffic in the second stage, you need to increase your bid or lower your investment-output ratio to the extreme, such as a investment-output ratio of 1.3, so that the through train weight of the link can get traffic.

But does a 1.0x investment-to-output ratio make sense? Everyone has a break-even investment-to-output ratio of more than 5, 6, or 7, so it is meaningless to have orders. Why do you have to bid so low to get orders now? There are two reasons: the platform traffic has decreased and the top links have increased the bid to grab orders.

The decrease in platform traffic can be seen from the excellent data curves of peers. In any case, the decrease in user demand after Double Eleven every year will lead to a decline in platform traffic. As for when it will recover, it depends on the weather.

The decline in platform traffic is not the main reason. What really makes people unable to get traffic is the full push of the net transaction function. Imagine a scenario like this: you are a manufacturer of warm slippers, you have cost advantages, and the styles are good, and you have 10,000 orders a day.

At this time, net transaction is turned on, and you also upgrade to net transaction. What is net transaction? It is the number of orders after deducting the second refund. So you see that the number of orders for the through train is more than 8,000. Since net transaction is turned on, the number of second refunds will decrease, which will lead to a decrease in the overall number of orders in the link. It used to be stable at 10,000 orders per day, but now it has become 8,000 to 9,000 orders.

If you were the boss, what would you ask of your operations department after seeing this data? Boss: We had 10,000 orders a day before, but now it has dropped. Do I pay you salaries just to eat and do nothing? Hurry up and find a way to get 10,000 orders for me.

So the operations staff thought of a way to quickly increase the number of orders, which was to lower the direct train production ratio. It's not that easy to get more orders, I just need to spend more money. As a result, the cotton shoe orders of this manufacturer increased to 10,000 orders, so where did the 1,000 to 2,000 orders come from?

Of course, it belongs to other merchants. Other merchants have fewer net transaction orders, and the orders are snatched up. There is no other way, so they can only reduce the investment ratio to grab the order volume. So there is an unprecedented grand occasion. Your investment ratio bid is low, and mine is lower than yours. What about the order volume?

The money is just circulating among the top merchants, while small and medium-sized merchants are the worst off. They have no price advantage and no advertising budget. So, I speculate that this wave of net transaction function will definitely eliminate a lot of small and medium-sized merchants with weak strength.

02The best way to solve the second stage of disconnection: low price

Through the above, we know why the second stage of the interruption is so serious. So, in this harsh competitive environment, my suggestion is to wait. Everyone has not fully digested the net transaction. I think it will take at least 2 to 3 months for all bosses to fully accept the actual number of net transactions.

At that time, the bosses will know that the current order volume is our real order volume, and they should no longer take the inflated order volume in the past as the standard. Of course, waiting is definitely not what the e-commerce boss expects. After all, he spends money to hire people to operate the business. If everyone does not work, then the salary will be wasted.

Therefore, I suggest that all powerful manufacturers use their unique skills: cost advantage to grab orders. The second stage of traffic interruption is essentially due to insufficient link weight. Price reduction or increase in advertising bid can increase link weight, and the weight brought by price reduction can be said to be very high. Of course, this is suitable for standard products.

First of all, price reduction is definitely weighted. The system recognizes that your price is lower than that of your peers, so it will give you traffic. Secondly and more importantly, after the price is reduced, your conversion rate will increase. The weighting brought by the increase in conversion rate is far greater than the weighting of your price reduction.

What the platform values ​​most is always conversion rate. As long as the price is low, the conversion rate will definitely be high. Don’t even mention the second-stage traffic interruption. As long as the conversion rate can be stabilized at more than 10%, you can run the through train with a limit of 100, and there is a high probability that you will get natural orders.

There is one point about low prices that all e-commerce operators must grasp. Lowering prices is not something you do mindlessly. If you are selling standard products such as food, toiletries, 3C, etc., you must know clearly how much the price of your product can bring about an effect.

For example, in the food category, if the price of a single product is reduced by 1 yuan, it is possible to bring about a sharp increase in the number of orders. For some products, the difference of 2 to 3 yuan in price can really make a world of difference in the number of orders. If everyone can achieve an increase in the number of orders by reducing the price by 2 yuan, there is no need to reduce it by 4 yuan. Isn't it better to get the maximum return on the number of orders with the minimum effort?

03A safe way to solve the second-stage interruption: segment the population

Due to limited space, I will not go into detail about the segmentation of populations. I have talked about it many times before, so I will just briefly mention it here.

Segmenting the crowd can help you escape from the circle of involution. Even if you offer a very low price for the through train, the flow of customers will not be cut off in the second stage. Why? Because there is no one to segment the crowd, there is no competition, so the flow of customers will not be cut off naturally.

04Finally

Traffic is a business, and it is normal to have ups and downs. For those of us who run e-commerce, don’t panic when you encounter a traffic crash. This is only temporary. Looking forward, maybe the traffic won’t go up tomorrow or the day after tomorrow? Right. So everyone today is still very happy. If you can seize the current traffic and convert it into orders, we will win.