Pinduoduo, China’s largest social e-commerce platform, is well known for its aggressive pricing as well as questionable product quality. Let's take a look at how Pinduoduo achieved low-cost user acquisition utilizing social power.
Cici received a link from her sister on WeChat, requesting her to click on it so that her sister could obtain cash rewards. She decided to do her sister a favor.
Cici then found out she also got a 79 yuan (US$12) cash reward. She was surprised at first but then found out the reward could be withdrawn only if she could obtain another 21 yuan (US$3) by inviting new users.
In short, she needed to achieve a threshold of 100 yuan to withdraw the fund.
She decided to try it out and shared the link with some of her friends. After only a few rounds, she accumulated already 98 yuan worth of rewards. But then it started to get harder: every new interaction brought her only a few more cents.
Finally, she did complete the task and successfully withdraw the...
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