Source: Kaiman 4000 (ID: kaiman4000) Recently, a mini-program has become wildly popular, emerging as an industry-recognized dark horse and sparking widespread discussion. This is Kuaituantuan, under Pinduoduo. Kuaituantuan launched in May 2020. Initially, although many suppliers tried to cooperate with it, it attracted little attention. As product categories grew, Kuaituantuan gradually drew some traffic, and from December 2020 to January 2021, its GMV experienced explosive growth. Kuaituantuan is not original in technology; it is an imitation and improvement of the community group-buying mini-program Qunjielong. How fast has this dark horse run? Kuaituantuan Growth Estimates "Rapid fission and frequent hit products" is the intuitive impression many industry insiders have of Kuaituantuan. On Kuaituantuan, a single link can achieve hundreds of thousands of orders. In some cases, a link's conversion rate can even reach 10%. One group leader said: "I've seen over 30,000 group purchases at most. If the unit price is 97 yuan, that means a single link achieved nearly 30 million yuan in sales." Typically, when a group is repeated, hit products can achieve such sales. For example, if a link selling laundry detergent sells well, it might ship 5,000 orders in the first week; a week later, the group leader repeats the group, possibly shipping another 50 million yuan, resulting in cumulative shipments of 10,000 orders. (Table 1: Key performance indicators officially announced by Kuaituantuan; Source: Kaiman based on official data) After rapid growth, what is its current scale? Official data shows Kuaituantuan's GMV is 60 billion yuan per year (see Table 1). To verify this figure, the author conducted research. The author found that in June 2021, Kuaituantuan's GMV was 2 billion yuan. According to internal expectations at the time, it aimed to reach 4 billion yuan by November 2021 (if calculated at 4 billion per month, annual GMV would be 48 billion, close to 50 billion). But actual GMV clearly falls short of that. Thus, it can be roughly estimated that Kuaituantuan's current monthly GMV is between 2 and 4 billion yuan, with annual GMV between 24 and 48 billion yuan. Overall, although the current scale still lags behind the official 60 billion yuan, Kuaituantuan's growth remains strong. Model: The Secret of Rapid Fission Currently, Kuaituantuan has initially run through its model. However, strictly speaking, the model was created by Qunjielong, and Kuaituantuan later imitated and improved it. The fundamental reason for Kuaituantuan's rapid fission lies in four unique characteristics of its model. First, product diversification greatly expands the selection range for small group leaders. In the community group-buying model, many small and medium group leaders, especially those with 1-2 groups, typically have a limited product selection. But on Kuaituantuan, the selection range is greatly broadened. For example, under Kuaituantuan, small and medium group leaders (as resellers) can help sell products listed by supply group leaders, offering a richer selection. Supply group leaders have different IPs, operating in categories like beauty and food. Small and medium group leaders can choose to subscribe to one or more group leaders' links based on their customer base, becoming their resellers. Many small and medium group leaders find Kuaituantuan "rich in products and high in profits," as if discovering a new continent, so many choose to join. (Figure 1: Kuaituantuan's flat organizational structure) Second, the organizational structure and profit distribution are more flat. This is crucial. Whether it's WeChat business, community group-buying, or community group-buying, there are more hierarchical structures. In community group-buying, group leaders are hierarchical, from low to high: junior group leaders, senior group leaders, and co-founders. In WeChat business, there may be more levels, from high to low: brand owner, partner, general distributor, first-level agent, second-level agent, third-level agent, etc. In multi-level structures, profit distribution favors higher levels, and bottom-level small and medium group leaders earn little. In Kuaituantuan, the organizational structure is completely flat, and this flatness is not limited by time or space! In its distribution system, there are only two roles: group leaders and reselling group leaders. The overall commission is set in advance by the person listing the product, and the group leader is responsible for shipping and after-sales. The profit distribution between group leaders and reselling group leaders is decided by the group leader, with no intermediate links. As long as group leaders allocate more profit to reselling group leaders, they can attract more people to help sell. This allows small and medium group leaders to earn higher profits, which is highly attractive. Let's use Kuaituantuan's reselling group leader commission ratio as a reference to compare profit margins across different business models.

  1. Compared with community group-buying: After capital groups entered, group leader profit margins were compressed to 5%-7%.
  2. Compared with community group-buying and WeChat business: Typically, due to multi-level structures, the profit margin for the most terminal WeChat business is usually only about 5%. On Kuaituantuan, if a product's profit margin is 30%, the group leader might give 15%-20% to reselling group leaders. Clearly, such a commission ratio is highly attractive to small and medium WeChat business operators and group leaders. (Figure 2: Kuaituantuan's fission model) Third, strong openness, connecting private traffic, uniting all forces that can be united to jointly scale up. On Kuaituantuan, if a product is sold through a reselling group leader's private traffic, the system automatically attributes the performance to the reseller. In the past WeChat business model, there was also a sharing-to-earn model. However, due to concerns about private traffic being easily taken over, many private domains were fragmented. This led to "my private domain and your private domain are clearly separated," and I wouldn't be willing to use my private domain to promote your products because it might divert my traffic to others. Kuaituantuan solved this problem in its mini-program design, achieving interconnection and sharing of private traffic. For example, after group leader A sets up a purchase link, when reseller B uses their private traffic to sell the product, the link displays B's personal page when users purchase. All sales records of resellers under a group leader are recorded, updated, and displayed in real time. If a link accumulates 10,000 orders at a certain point, all shared links update to this data in real time, and the distribution of these data is clear and transparent. Fourth, flexible role switching between group leaders and reselling group leaders, which helps improve group efficiency and create hit products. In Kuaituantuan's model, the roles of group leader and reseller are not fixed; they can switch flexibly. For example, a group leader selling product C plays the role of group leader, leveraging resellers to sell together. At the same time, if this group leader finds another group leader's product D is a hit, they can switch their role to reseller and participate in selling product D. This flexible role switching facilitates concentrating forces, breaking the ceiling of group leaders' private traffic, improving conversion rates, and creating hit products. Grabbing People: It's About Grabbing Private Traffic After the initial success of the model, the most important thing is to grab people, and of course, the most important is the private traffic behind them. Where to grab people from? Since Kuaituantuan mini-program is very similar to Qunjielong, the latter's group leaders, especially star group leaders, are naturally targets for Kuaituantuan. To compete for Qunjielong's top resources, Kuaituantuan offered a series of incentives: subsidies linked to performance (set in tiers based on performance), exchange rate fee subsidies (Kuaituantuan waived the usual withdrawal fee of a few thousandths), etc. Soon, four star group leaders were successfully recruited by Kuaituantuan, including Haitao from Qunjielong. In fact, Kuaituantuan's group leaders come not only from Qunjielong but also from former Taobao WeChat business operators, daigou (purchasing agents) who transitioned due to the pandemic, Weidian owners, social e-commerce platforms like Huasheng Riji and Fenxiang Shenghuo, as well as participants from Youzan, Yunji, and other platforms. The diversification of group leader sources also indirectly proves Kuaituantuan's attractiveness. Effective people-grabbing measures have driven Kuaituantuan's rapid scale expansion. Correspondingly, the team size is also expanding rapidly. Currently, in the Pinduoduo building, the Kuaituantuan business line has several hundred people and is still recruiting. Overall Situation: An Important Piece on the External Front What significance does the Kuaituantuan business line have for the entire Pinduoduo system? One who does not plan for the whole cannot plan for a part. We must think from a global perspective about Kuaituantuan's significance to Pinduoduo. In the competitive landscape, there are usually external and internal fronts. The internal front is the frontal battlefield where it's hard to change the situation in the short term. The external front is the flank where breakthroughs can be made in the short term. After the outbreak of the Chinese Civil War, Chiang Kai-shek launched key attacks on the People's Liberation Army, putting the central base in northern Shaanxi under pressure, which became a stalemate on the internal front. Mao Zedong assessed the situation and decided to carry the war into enemy-occupied areas. The Liu-Deng Army advanced a thousand miles into the Dabie Mountains, successfully containing enemy forces in Central China on the external front, changing the overall strategic situation. Similarly, for Pinduoduo, although the capital group landscape is basically clear, the five-power competition among Pinduoduo, Meituan, Xingsheng, Alibaba (Taocaicai & Hema Neighborhood), and Jingxi Pinduoduo will continue. In the short term, no one can achieve overwhelming advantage, so a quick victory has become a protracted war. Under these circumstances, while Pinduoduo is steady on the internal front, it is also actively seeking opportunities on the external front. In this process, Kuaituantuan plays the role of an external surprise force. Since its launch, Kuaituantuan's growth has mainly relied on grabbing community group-buying group leaders' resources and their private traffic. It operates as an independent business unit under Pinduoduo. Currently, Kuaituantuan has little overlap with Pinduoduo's community group-buying business. In the future, for Pinduoduo's top management, as Kuaituantuan continues to expand, they will inevitably consider how to achieve strategic synergy between Kuaituantuan and businesses like Duoduo Maicai. Currently, Pinduoduo is already considering importing B-end resources into the Kuaituantuan system. At that time, Kuaituantuan will have both public and private traffic characteristics, giving it greater development imagination space, but also posing some challenges to its fission model. Concerns: Kuaituantuan's "Skyline" Currently, Kuaituantuan is leveraging its good growth momentum to continue increasing new user acquisition and drive scale growth. At the beginning of this article, we also mentioned that although Kuaituantuan's growth is generally fast, it seems not to have reached the ideal level. Are there bottlenecks in Kuaituantuan's growth now and in the future? At least for now, Kuaituantuan's growth is relatively healthy, reflected in the balanced growth of GMV and profit. However, Kuaituantuan also faces some potential constraints. First, Kuaituantuan's "one-click drop shipping" fulfillment model and flat, high-margin-driven characteristics determine that it mainly targets non-high-frequency, relatively non-essential consumption scenarios, different from community group-buying's high-frequency, essential products. For example, blind boxes, beauty products, etc. Higher unit prices ensure higher gross margins. This category or scenario limitation may become a constraint on Kuaituantuan's growth in the future. (Table 2: Main product categories and price ranges on Kuaituantuan platform; Source: Kaiman research) Second, higher unit prices determine that its business is mainly concentrated in first-tier or new first-tier cities, and it cannot yet penetrate lower-tier markets for further sales expansion. Although first-tier cities have higher per capita income and stronger consumption capacity, if it cannot continue to penetrate second- and third-tier markets or lower-tier markets, its scale growth will be constrained. After all, although high-income groups have strong consumption capacity, their marginal propensity to consume is lower than that of middle- and low-income groups. Whether it will continue to advance into second-tier and lower-tier markets, and how to balance profit and scale, depends on next-step strategic considerations. Third, under the internal value distribution system, fierce competition leads to involution and polarization among group leaders. On one hand, for group leaders, especially small and medium ones, Kuaituantuan's biggest attraction is its flat mechanism. But this also leads to intense competition among group leaders for resellers, lacking competitive differentiation and regional protection. On the other hand, as a platform, Kuaituantuan will tilt resources toward excellent group leaders with higher GMV. Once becoming an excellent group leader, the platform matches certain resources (see Figure 3). For example, after becoming a star group leader, one can enter several Kuaituantuan group leader groups for roadshows and recruit people into their reseller groups. For group leaders, a basic threshold to gain platform empowerment is becoming an excellent group leader, but resources are relatively scarce and limited. As Kuaituantuan expands rapidly, the number of group leaders increases. The performance threshold for excellent group leaders rises, and other assessment indicators emerge. For example, a group leader told Kaiman that although they met the 300,000-500,000 yuan performance standard for excellent group leaders, the platform did not include them because they were newly registered. According to data from Kaiman, there are as many as 400 group leaders with cumulative monthly sales of over 700,000 yuan. The top group leader's performance reaches 50 million yuan, which indirectly confirms the intensity of internal competition and the increasing difficulty of becoming a star group leader. (Figure 3: Kuaituantuan platform services and support for group leaders) A completely flat organizational structure also constrains the sales of hit products to some extent. According to the 80/20 principle, true hit products are always in the minority. Under such circumstances, group leaders often wait and see. If a top group leader sells a pair of slippers well today, tomorrow other group leaders will imitate and offer higher profit margins to resellers. This leads to a situation where yesterday everyone sold yours, and tomorrow they are attracted by higher profits to sell the same product from me. Under internal competition, a hit product may be simultaneously represented by multiple agents. This phenomenon is more evident among top group leaders. The reason is simple: resellers usually follow and subscribe to top group leaders. Conversely, the resellers of top group leaders may overlap (even up to 80% or more). The number one group leader, to "strike" at lower-ranked group leaders and maintain their ranking advantage, will allocate a higher proportion of profit to resellers. This leads to two negative effects. First, vicious competition among group leaders results in resellers making money, while group leaders may not earn much. Second, hit products may quickly be "killed." After top-ranked group leaders set commission ratios, lower-ranked group leaders cannot allocate more profit space to resellers and can only give up selling the product. This clearly constrains the overall sales of hit products. Of course, community group-buying platforms like Xingsheng Youxuan also have similar situations. Under these potential constraints, how far can Kuaituantuan, this dark horse, run? Kaiman will continue to pay attention. Comment by Teacher Li Baolin, community e-commerce expert and advocate of group brand new retail: The rise of Kuaituantuan is a product of the differentiation and iteration of community e-commerce, with its era and industry background. Kuaituantuan is under Pinduoduo, and like Ma Xiaoyue, it is a strategic move in Huang Da's determination to enter the community track, aiming to encircle and annihilate the core asset in the community track—group leaders. Everything else is auxiliary. How far can Kuaituantuan, this dark horse, run? In the short term, Kuaituantuan's "tool + empowerment" model has advantages, seizing some original market share of community group buying and enjoying phased dividends. In the long term, whether Kuaituantuan can maintain its growth trend depends not only on the project itself but also on the competitive situation of the entire Pinduoduo segment in the community track, its strategic environment, and the pace of key drivers. It should be emphasized that since Kuaituantuan is a product of imitative innovation from Qunjielong, the two have great similarities. For this reason, the pitfalls Qunjielong has encountered and the stage ceilings it faced will also be encountered by Kuaituantuan, despite having the parent company's genes and strategic resources. Private traffic operation and value realization are the core propositions and strategic support of Kuaituantuan and its peers. But success and failure are the same: when private traffic becomes public traffic, it may also be the time when the model's decline begins. Are you "watching" me?