Kuai Tuan Tuan is “eliminating” brands

Consumers used to prefer big brands, believing that their quality was reliable and guaranteed; later, consumers turned to small, beautiful and distinctive brands; now consumers’ decisions are no longer easily influenced by brands, but trust the voice of social relationship chains. A group of group-buying products represented by "Kuaituantuan" are becoming a new force in the consumer market. The author of this article analyzes this, let's take a look.

01 The “secret” behemoth

Nuts from Xinjiang, 3J pure ice cherries from Chile, and several kilograms of yellow croaker from Zhoushan...

Little A showed us her recent shopping records. These specialties from all over the world filled up several screens of her mobile phone.

She said: "When my family buys fresh food, we used to order it from online supermarkets, but over time, we encountered many cases of unstable quality, which was very frustrating. In the past year, we have started to follow the group buying of the group leader in our community. The products are well selected and we have never made a mistake. Moreover, the price is very affordable. For seafood, as long as we place the order in advance, it can be delivered to the community in the afternoon of the day it is caught. Which platform can do this?"

The quality of group purchases praised by Xiao A is attributed to the group leader, who lives in the same community as Xiao A. We first met when community group purchases were on the rise. As the person in charge of the outlets, the group leader had to manage customer orders and arrange the goods after they arrived. Except for sleeping and taking care of the baby, he was almost always responding to and handling various customer questions.

Later, community group buying died down. The group leader relied on the accumulated resources to explore a high-quality supply chain and began to publish farmers' products and ingredients on Kuaituan. He also group-purchased seasonal snacks and meals according to customer needs. His reputation was quite good, and he even attracted customers from the neighboring community.

Unlike Little A, Little B and her team leader were strangers to each other.

"A friend recommended it to me, and I bought from him once. I thought it was good, so I kept buying from him. I can receive push notifications on WeChat when the group leader has new products, and I will go and check them out if I'm interested. Now almost all the fresh fruits, vegetables, and even daily necessities are bought by this group leader." This is how Xiao B introduced his experience with Kuaituantuan.

Compared with Xiao A and Xiao B, Xiao C felt very unfamiliar with Kuaituantuan. He described his life as "rarely checking WeChat at work, and checking Douyin when getting home from get off work." The lack of group leaders and deep users around him led him to be unaware of the secret popularity of Kuaituantuan.

In fact, this group buying tool based on WeChat mini-programs has been around for 3 years.

It is backed by Pinduoduo and was initially positioned as a traffic and distribution tool similar to Taoke. In order to attract top distributors from other ecosystems, it does not hesitate to offer favorable entry conditions, thus increasing its overall traffic and volume in the short term.

Then, it developed beyond expectations.

Because it is easy to use, almost free, has no technical and financial barriers, and is backed by a large platform, it has gradually attracted a large number of micro-businesses, purchasing agents, Taobao agents and community group buying players to enter.

In 2021, the sales volume of Kuaituantuan exceeded 60 billion yuan, and in 2022, it is expected to double to more than 120 billion yuan. It quickly gathered a huge amount of energy like a new star, making outsiders curious why it took only three years for Pinduoduo to grow into a giant.

02 Three Keywords

1. Private Domain Tools

Kuaituantuan is positioned as a private domain tool, which means that there needs to be direct contact between buyers and group leaders, or at least an intermediary to act as a go-between, so that buyers can see the products posted by the group leader and buy them with the group.

You will find that no matter how you change the keywords on the mini program, you cannot find a group leader you don’t know. At the same time, the system does not provide functions such as rankings, and buyers can only follow a group with limited choices.

But on the other hand, the private domain also brings a certain degree of familiarity and trust. Many group leaders start to develop customers from offline communities and neighbors, and often use a combination of WeChat communities + Kuaituan links to sell online. Customer stickiness and repurchase rates are surprisingly high.

As a tool serving group leaders, Kuaituantuan has done an excellent job in terms of product simplicity and power.

The clear layout and structure allow team leaders to quickly find the capabilities they need.

Detailed data services allow you to see all the details of the customer's payment process.

The data summary includes which customers viewed which products, when and how often the products were viewed, which customers are old fans worthy of attention, whether additional customer operations are needed, etc., providing group leaders with convenient tools on mobile devices.

2. Distribution Mechanism

In Kuaituantuan’s business model, distribution is the most critical link, which directly multiplies the sales effect.

After the group leader starts a group, he can send out the group opening link to sell directly, or he can set a commission for distribution. In the distribution scenario, the group leader can forward the product link with one click to introduce it into his own private domain traffic.

In addition to forwarding the group leader's link, the group leader can also resell products from the Pinduoduo Mall.

In this mechanism, the identities of the group leader and the assistant sales leader can be interchangeable.

When there is a stable first-hand source of goods, everyone can be a group leader, and can also develop their own assistant sales leader; at the same time, each group leader can also help others sell goods and be someone else's assistant sales leader.

It is estimated that in Shanghai alone, there are more than 1,000 large-scale group leaders, with monthly turnover ranging from hundreds to tens of millions. In the private domain of each group leader, there are hundreds or thousands of group leaders who help sell goods, scattered in various communities and circles.

3. De-branding

Although Kuaituantuan’s original intention was to hope that group leaders would sell products from Pinduoduo merchants, in reality, group leaders prefer to be self-reliant.

It is reported that more than 95% of the goods on the platform come from group leaders' selection, helping many unknown brands to reach consumers.

The process is simple enough. As long as the group leader completes the contact with the supplier and provides proof of qualifications to the platform, he can start group sales.

Different from other platforms, the product descriptions here are more "internet celebrity-like".

Keywords such as "same style as in a certain supermarket", "direct sales from the place of origin", "welfare", "as low as XX yuan" and so on appeared one after another, and colorful emojis attracted attention.

These products often have clear purchase deadlines, and the anxiety of missing out urges users to place orders.

In the interface, the massive purchase records bring the shopping atmosphere online. Thinking "so many people are buying it, it must be good, right?", it is natural to click to buy.

When there is a lack of knowledge about the brand, all the seller's actions depend on the trust in the group leader. They believe that the group leader has worked hard to strike a balance between quality and price, and has transformed emotions into purchasing power. The positive feedback received after the purchase increases trust and leads to the next purchase. In this way, the positive cycle of trust monetization is truly established.

After repeated purchases, customers eventually formed a rule of action of "buying with eyes closed", which also made little-known products become hot-sellers.

Suppliers were pleasantly surprised to find that as public domain traffic becomes increasingly expensive, no-brand and small brands can find their own suitable survival rules here.

03 The contradiction behind the popularity

Because it is easy to use and can meet the needs of group leaders for quickly forming groups, order statistics and one-click payment, Kuaituan experienced a wave of explosive growth in the first half of last year when other shopping channels failed.

According to data from Guojin Securities, the Kuaituantuan mini program had a year-on-year growth rate of 448% in DAU (daily active users) in March 2022. During the lockdown in Shanghai, nearly 800,000 people had experience as group leaders, and 60% of them chose to use "Kuaituantuan" to initiate group purchases.

As of now, Kuaituan has grown into a super tool with more than 10 million daily active users. Under such a huge scale, some contradictions in platform governance have gradually emerged.

For example, in terms of regulatory review, there is a contradiction between the speed of review and the speed of new product introduction.

According to the official introduction, the products currently sold by Kuaituantuan include fresh fruits and vegetables, beauty and personal care, home life, food and health care, and various virtual products, covering 90 industries.

Each industry has different audit standards, and they are dynamic. How to conduct fast and accurate audits for more than 90 industries without affecting product launches is a problem that Pinduoduo officials will face.

Another example is the contradiction between quick payment and after-sales rights protection.

The most attractive thing about Kuaituantuan is that it has the fastest payment speed in the entire network. If you sell the goods today, you can get the money in your hands tomorrow.

In addition, Kuaituantuan only charges a withdrawal fee as low as 0.6%. If the task is completed well, you can get a cashback of 0.3%.

However, such a fast withdrawal speed makes it more difficult for customers to obtain refunds and protect their rights. The interests of merchants and customers need to be further balanced.

Another example is the issue of sales quantity and quality under rapid development.

Similar to live streaming e-commerce, Kuaituantuan is also good at creating scenarios to trigger impulse purchases among customers.

I received a warm recommendation from the group leader in the group. I clicked on the link and saw that there were many people joining the group. So I couldn’t control my eager hands and started buying things.

The resulting high refund rate is also affecting Kuaituan’s reputation and the real interests of group leaders.

04 A history of brand elimination

Looking back at the history of e-commerce, we can see how technology changes consumption, and how consumption changes brands.

The earliest e-commerce took advantage of the era when everyone was online. The speed of information interaction and circulation on the Internet allowed users to truly feel the joy of online shopping.

Everyone is delighted to find that so many things that are not available or difficult to buy offline can be bought online. The Internet connects buyers and sellers with scattered supply and demand, and efficiently facilitates interactions.

The online prices are very attractive as offline channels have been eliminated. For beauty products and clothing with high enough profits, the price difference can even reach half.

During this period, buying cheaper genuine products became the mainstream of consumption. Brand still ranked first in decision-making, but consumers began to use different e-commerce platforms to explore more reasonable prices and become smarter consumers.

Taobao, which was founded in 2003, soon launched guaranteed transactions, and purchasing authentic products online became a high-frequency keyword. JD.com, which started in 2007, turned its attention to 3C brands. Vipshop, which started in 2008, helped major clothing brands to clear their inventory elegantly, all of which reflected the consumption trend of brand being king.

As the trend of mobile Internet intensifies, e-commerce has also entered the mobile stage.

Mobile phones began to absorb a lot of users' leisure time, and online shopping became available anytime, anywhere. In addition to opening the app when there is a clear purpose, people are also keen on browsing aimlessly. The appeal of the original familiar brands gradually faded, and in the e-commerce world where people are tired of the old and love the new, more new brands are beginning to be called for.

In order to cater to consumers' demand for shopping, content platforms such as Mogujie and Meilishuo emerged, and the first batch of Internet celebrities also began to emerge. Guiding purchases through content has become a good business.

In the new content field, brand is no longer the first factor in attracting users, and new brands emerge one after another in competition to see who understands users better.

With a regular subscription mechanism, Dollar Shave Club provides users with a more convenient experience. Only established three years ago, it has a 51% share of the domestic online market in the United States, surpassing the old brand Gillette to become the largest online men's razor brand in the United States.

Casper became the industry leader in 3 years and went public in 6 years, and achieved such success only through online sales of mattresses. It limited the number of mattress SKUs to four, allowing consumers to choose without pressure. It also offers a 100-day free trial after home delivery, completely eliminating the worries of buying a mattress.

The development paths of these brands are similar: focusing on the needs of new groups, creating new models and new experiences, and leading a new lifestyle.

At the same time, established brands have also become more down-to-earth, opening Tmall flagship stores, engaging in cute interactions on Weibo, and running official WeChat public accounts. Even luxury brands are not immune to this series of down-to-earth operations.

In the mobile era, new and old brands shine together, and everyone has deeply felt the impact of the Internet, actively or passively innovating their own operations and designs with user thinking. If you want to give this period a keyword, it is the dance of new and old brands and traffic.

Back to recent years, the traffic trend has changed again, which has led to de-branded consumption.

Videos and live broadcasts occupy the vast majority of our online time, and online consumption has become more rational. People will first check Xiaohongshu and Weibo before doing any daily research or weeding.

The "2021 Young People's Consumer Behavior Survey" initiated by DT Finance and CBNData shows that among those born in the 1990s, 1995s and 2000s, the top channel for making shopping guides is "social platforms such as Xiaohongshu and Weibo". Among those born in the 1990s, only 29% of the respondents said they would use "video platforms such as Bilibili and Douyin" to make guides, and among those born in the 2000s, this proportion reached 43.3%. For young people of Generation Z, it is a routine operation to watch all the review videos searched out before buying a pair of noise-canceling headphones.

Up masters, anchors, and big Vs, these weak social relationships have begun to support our consumption behavior and become a stop before shopping. But compared with KOLs, more young people hope to refer to spontaneous feedback from real users.

The data shows that when asked "Which factors have the greatest impact on decision-making before placing an order?", more than 70% of respondents chose "user comments", while only about 20% chose "Internet celebrity evaluation results".

At the same time, people's attitudes towards "big brands" have also changed. Nearly 20% of people are willing to spend more money on "big brands"; but nearly 30% of people stand on the opposite side, saying that "big brands" are not worth spending more money on.

Multi-faceted exploration, trust in reality, smart consumption, and brands taking a back seat may be the consumption keywords of this era.

Under the influence of the de-branding concept, many suppliers no longer expect brand premiums and offer more cost-effective prices to suppliers. Pinduoduo and Kuaituantuan are the responders to this trend. At the same time, smart consumers also flock to these platforms to find the same items as big brands, or substitutes.

05 Ending

Before 2012, Jack Ma and Wang Jianlin debated whether e-commerce could replace traditional store operations. The two sides also made a 100 million yuan bet on whether e-commerce could account for more than half of China's retail market share in 10 years.

In the past year of 2022, this number reached 30%. In the past 10 years, with the help of technologies such as mobility and 5G, almost every one of us has been deeply involved in this bet.

Looking back at the history of e-commerce, what we initially experienced was the joy of a rapid increase in SKUs from scarcity. A wide range of brands, cheaper prices, and authentic products that could be delivered to your doorstep within a few days allowed Tmall, JD.com, and Vipshop to firmly grasp the pain points of users.

Later, we no longer believed in big brands. New consumer brands that were good at self-involution and domestic brands under the strong rise of national trends became popular on the Internet. We fell in love with small, beautiful and distinctive brands, and even pursued niche and peace of mind to highlight our smart consumption proposition.

Later on, our consumption decisions are no longer easily influenced by brands. We care more about the voices conveyed by social relationship chains, the recommendations of internet celebrities, and the lively community atmosphere of everyone scrambling for products. These have created an ecosystem with thousands of different faces and a hundred flowers blooming.

In the era of personalized consumption, the weight of brands is gradually decreasing, which also gives more new products opportunities to compete and emerge. On Kuaituantuan, these products are making their voices heard through the hardworking group leaders.

Pretend to be an operator, WeChat public account: SaaS Xuejie