敲钟前的黄峥：拼多多对微信的依赖度会越来越高（虎嗅）

不去美国上市敲钟是因为之前有中耳炎，气压变化很难受。在哪敲钟这并不是什么大不了的事儿。另外一方面，毕竟很多人去美国不方便，对于我来讲，如果有机会和消费者、员工，包括媒体，以前帮助过我们的人能够在一起的话，感觉更好一点，比…

Source: https://m.huxiu.com/article/254628.html

Before the Bell: Pinduoduo Will Rely on WeChat More and More (Huxiu)

> By Colin Huang · 2018-07-26 · [Original link](https://m.huxiu.com/article/254628.html) (Chinese)
> Only Colin Huang's own answers; lines marked (Q) summarize the question and are not the interviewer's wording.
> Our translation from the Chinese original.

**(Q)** Why ring the bell in two places?

Not going to the US to ring the bell for the listing is because I had an ear infection before, and changes in air pressure are very uncomfortable. Where to ring the bell isn't some big deal. On the other hand, after all, it's inconvenient for many people to go to the US. For me, if there's a chance to be together with consumers, employees, including the media, and people who helped us before, it feels a bit better, better than running off to that place by myself as if this thing were all mine.

**(Q)** Do you feel any regret?

I really don't. This thing is just a process; it's a form, it doesn't affect the substance; me ringing it once won't change anything.

**(Q)** Subscriptions were hot and you had the right to raise the price 20%; why stick to 19 US dollars?

If you ask whether I was tempted, actually I was tempted; that's no small amount of money. But this was also a good opportunity to show everyone our values.

I wrote a few points in the prospectus, and one of them is that I don't take advantage of others, even if I can buy. Because we ourselves announced a price range, 16~19 US dollars. Normally, when investors come to place orders, normally they don't know you'll raise the price. When suddenly you get dozens of times oversubscribed, they have no way out; if you raise the price, they can only accept it. But to some extent this is taking a bit of advantage of them, because I'm in a favorable position. Before they place their orders, though, they're in the favorable position; they've given me their money, and I'd still be charging a fee; that's a bit of maximizing self-interest.

**(Q)** Did you expect subscriptions to be this hot?

You could say I'm not surprised. I think sometimes standing at a distance gives a better state of mind. On the one hand, the capital market is relatively more mature and somewhat more rational, less affected by this kind of emotional thing; and being at some distance from China, it will think about this question more from the angle of relatively macro trends and the reasoning behind them.

Of course, as an investor I'd really be very excited too. Pinduoduo really did reach a volume that can't be ignored in a very short time, and this volume and development to some extent prove that a new model holds up. This kind of volume and growth to some extent can of course not be handled by your team's ability alone; to a large extent there really is an element of luck in it. So I say Pinduoduo is still at an early stage, so naturally there's a lot of room.

**(Q)** Traffic costs are rising; where is the room for future growth?

If you look at your so-called traffic costs, you'll see in the financial reports that our marketing spending suddenly soared. Suppose your ability to acquire users had weakened; then your costs would rise gently, not suddenly jump up.

The main reason is that our advertising revenue increased. After advertising revenue increases, in a growth period you still have to use this money well; you can't start paying dividends now, can you? So you have to look for things that help your company's intrinsic value over the long term. As of now, brand advertising may be a beneficial thing for Pinduoduo, because compared with the old-brand e-commerce companies, in users' minds, Pinduoduo is somewhat weaker in trust and also in name recognition. Hearing about Pinduoduo from a friend and seeing Pinduoduo on CCTV are actually still a bit different.

So we spend a lot of money on brand advertising. In our hearts, from the management's angle, we feel this is a long-term investment. If we keep spending this money, two or three years later Pinduoduo will become a brand with fairly high credibility in consumers' minds. It's like buying an intangible asset, but on the financial statements it can only be counted as a marketing expense.

If you think about this with an ordinary mind: when you see an ad at the World Cup, the World Cup's scenario is drinking beer and eating chicken wings in front of the big screen; who has the spare time to download an APP? That's not very likely. But Pinduoduo appeared in this scenario, it added an impression in his mind, and he'll see you linked with the World Cup, so his trust in you will rise. But this is a long-term process of subtle influence.

**(Q)** With users at 300 million, are you entering a stable period of the existing base?

It's still pretty fast now. Because in China Taobao is too famous; there's no one who doesn't know it, so these 300 million people of yours all know or have used Taobao. Since you've already started using Pinduoduo in some scenarios, then why wouldn't American users? [Translator's note: so in the original, 那为什么美国用户不会呢; the reference to "American users" is unexplained in the source.]

**(Q)** What did institutional investors care about most, and understand least, at the roadshow?

On the one hand Pinduoduo is a new thing; it rose very fast and in itself broke through some arrangements of interests. In such a situation there are bound to be quite a few people, whether competitors or others, who go through a process of acceptance. They also have a certain bias, not a subjectively malicious bias; because the position and state they're in don't fit, they'll be in this state.

So Pinduoduo's frontline consumers, who vote with their feet, are the clearest about it. Every day they're checking whether one of 10 mangoes is bad, whether it's actually getting better or worse; they're very clear. But those caught in the middle are influenced every day by all sorts of voices around them; they can reach the front line, yet they aren't on the front line. At that point the demands on this person are especially high, and this is a very hard thing.

**(Q)** How do investors see "the e-commerce Facebook" and "Costco+Disney"?

Looking at it from a macro angle: for example, in Shanghai's Changning District, the average life expectancy of Changning residents is 84.6 years, the highest level in the world, and the material standard of living is also very high. So for them, upgrade to what? How much room is left to upgrade? Must you replace the soap they use every day with French imported handmade soap? Is that what they need?

So for people like those in Changning District, including first-tier cities like Beijing, the real consumption upgrade is spiritual: are there good films and good books, can city people communicate. The upgrade of this thing far outweighs turning a bar of soap into a bar of French handmade soap; even turning it into handmade soap only meets their spiritual needs. So this is the macro trend: first material growth, and then spiritual consumption, as the whole of human society becomes enormously rich materially.

Bringing it back to brick-and-mortar business: first came efficiency-type supermarkets like Walmart and Carrefour, and now it's become all-round experience-type complexes like Kerry Centre and Wanda Plaza. The share of retail held by the all-round experience type is rising, while Walmart and Carrefour are decreasing. Even looking at the data from an investment angle, this is clear.

So Pinduoduo's overall direction has no big problem, from a macro angle. On the small side, you also see its data: the data is rising, overall user retention is very good, and it also merges consumption and entertainment, which is a bit of a highlight.

**(Q)** Do group-buying links bother people?

What consumers care about more is the value, not how fun it is; at first contact it's novelty. The sense of difference between pin and search is still deep in users' minds. I don't think it's a passing wind; especially having grown to this volume now, it can't be a passing wind that's gone after a week.

But in a group chat, if no one posts at all, it may be boring too; if someone posts 50 times a day, everyone will feel it's a nuisance. Actually we're studying this point very diligently, and sometimes even controlling it, that is, not prompting users to do this spreading.

**(Q)** User growth and retention in the last three months? (the "WeChat minus Taobao" view)

First, I'm very sorry: around the listing, I can't disclose data beyond the prospectus, but I can talk about it vaguely. First, taking WeChat users minus Taobao users as Pinduoduo's users doesn't hold. Why? Because to use Pinduoduo you at least need a wallet, the ability to pay, and Alipay's penetration is about the same as WeChat's; many of the users in WeChat don't even have a wallet.

You also have to consider one thing, which is Taobao's penetration in China; that's no ordinary thing, including Teacher Ma's [Translator's note: 马老师, "Teacher Ma", a common nickname for Jack Ma] name recognition; I think he may be one of the most famous few people in China. In this situation, whether in villages or cities, Taobao's awareness is extremely high. Alibaba isn't a foreign company out of touch with the ground; it's one that can mobilize ten thousand people to go paint walls in the countryside. So in this situation, how could there still be 300 million users who don't know Taobao and have never used Taobao? That's impossible.

**(Q)** Is Pinduoduo doing consumption downgrade?

I don't like this term. I don't know who came up with it, or from what angle they're looking at the question. Conversely, about consumption upgrade, which I just talked about, I also don't quite agree with many people's current understanding.

First, a city like Shanghai has no need at all to become a city where everyone uses French soap. I think its daily life is already at the level of a world-class city for living; how much more upgrading does it need?

Second, each person's upgrade is different. Some people may feel, I have no kitchen paper, I want to buy a few sheets of kitchen paper, I want to upgrade; for some, going for natural plain colors is an upgrade; some want no logo on their clothes...... Different people's upgrades are different.

China's current state, I think, has as its main problem imbalance: the rich are already rich enough, including Pinduoduo listing. The media writing about how rich we are, this is a very frightening thing; there's still a very broad base. So we still pursue the individualization, differentiation and fairness of consumption. As I recall, Liu Qiangdong (刘强东) once in an interview described a phenomenon mentioned in The Wealth of Nations: the poorer and more backward the place, the more expensive things are, rather than the richer places being cheaper, and this phenomenon is widespread. I think Pinduoduo has a dream in leveling consumption.

**(Q)** What role does Tencent play after the listing?

[This answer is the same as in [“Before the IPO: On Pinduoduo's Relationship with WeChat and Taobao (Jiemian)”](/people/huang-zheng/read/hz-dual-19-2018-jiemian-pre-ipo-interview/?lang=en); it is not repeated here.]

**(Q)** How do you go from "teaming up for value" to "teaming up for good goods"?

From Pinhaohuo to Pinduoduo, it's not that we gave up the pursuit of good goods, but I think the word "goods" is a bit too subjective. What Pinduoduo has always pursued is high value for money on the basis of "you get what you pay for". The core of what truly retains users is that they've bought mostly things with fairly high value for money.

Second, the good goods you mention: for example, in this office building in Shanghai there still aren't many people using Pinduoduo, which shows two problems: first, the richness of our products isn't enough yet; second, whether my algorithms can also keep getting better and do matching better and better.

**(Q)** How do you improve quality?

First, we did Pinhaohuo, which at least proves we have the ability to do it. All of Pinhaohuo's losses are also in our financial reports, but they're not serious; Pinhaohuo lost very little. Pinhaohuo and Pinduoduo are actually the same road; it just depends whether you use the self-operated model or a platform model stacking it up bit by bit.

Each of these two has its merits. Under the self-operated model, single items or some categories get rolled out quickly and the effect is fast, but as the scale expands, it's hard to say one company does everything in all of China. It has no economies of scale. The downside of the platform model is that at the beginning gross margin becomes more [Translator's note: so in the original, 毛利变多, "gross margin becomes more"; given that it is listed as a downside, the sense may be the opposite], and iteration is slow, but its upside is that it's very easy to cover, and another is that it's relatively stable, because it's stacked up bit by bit, and once stacked up it doesn't easily come down.

**(Q)** With prices held down, how do you ensure quality and raise stickiness and order value?

First, under the platform model, competition among merchants gets fiercer and fiercer, and its quality will keep rising; second, when the volume gets large enough, a qualitative change will appear in some categories, and C2M becomes possible.

**(Q)** Do you agree with Liu Qiangdong's "consumer experience matters most"?

**(Q)** How did you get close to Duan Yongping (段永平) and Sun Tongyu (孙彤宇), and how did they help?

I've known both of them for about ten years. Duan Yongping was introduced by Ding Lei (丁磊); later in the US I lived very close to his home, so we got fairly close. Sun Tongyu was also one of the earliest to do e-commerce, and I'd go to him for advice on many questions. I think in business philosophy, including the word "benfen" (本分), that's also their corporate culture, so I wrote it into the prospectus, which shows how deeply this thing has influenced me. [Translator's note: 本分, roughly "doing one's proper duty", is kept in pinyin.]

**(Q)** How do you repair relations with merchants?

First, thanks to Taobao we're already very lucky: the scale of merchants and the intensity, compared with back in the Taobao days, are already much better. On the other hand, at such a large volume, some conflicts are unavoidable; you can't skip stages, but the time can be shortened. Quarreling sometimes isn't necessarily a bad thing: a couple who never quarrel will surely divorce at the first quarrel, while if you quarrel every day over little things, the relationship is actually good.