The Dilemma and Breakthrough of Pinduoduo-style Social Fission in the European and American Markets: New Thinking on Web3 Growth

Written by: Stella L

As Web3 projects expand around the world, many projects are beginning to think about how to break through the growth bottleneck caused by regional cultural differences. The social fission model that has been tried and tested in the Asian market has repeatedly failed in the European and American markets. Behind this phenomenon, it reflects more complex cultural differences and user psychology.

Pinduoduo Model: The Secret to Social Media Success in Asia

Pinduoduo's success has brought the marketing method of "social fission" to its peak in the Asian market. From its establishment in 2015 to 2020, Pinduoduo achieved an astonishing growth of 788 million annual active buyers in just five years (according to Pinduoduo's financial report), becoming China's second largest e-commerce platform.

The reason is,First of all, it is based on Asia’s deep collectivist cultural foundation.Here, interpersonal relationships are intertwined and people have a strong sense of group identity. Sharing preferential information not only does not bring social pressure, but is instead seen as a way to maintain relationships. This cultural foundation provides a natural soil for social fission.

Secondly,This is largely due to the highly digitalized social environment in Asia.The combination of a well-developed mobile payment system and high-frequency social media usage habits has given rise to a mature digital social culture. People are accustomed to sharing all aspects of their lives on social platforms, including consumption experiences and shopping discounts.

More importantly,Pinduoduo has a precise grasp of user psychology.They successfully transformed the individual behavior of "saving money" into a social topic, reduced marketing traces through carefully designed gamification mechanisms, and cleverly used the power of the community to create a strong sense of participation. This approach not only allows users to participate spontaneously, but also allows them to remain active.

It is worth noting that Pinduoduo's success not only relies on the social fission mechanism itself, but more importantly, on its deep understanding of local user behavior patterns. They perfectly combine the two seemingly contradictory concepts of "saving money" and "socializing" to create a unique "social + business" model. This precise understanding of local user psychology provides important inspiration for us to think about how to promote social fission in other markets.

This successful model was subsequently tried in many Southeast Asian markets. Many local social e-commerce platforms adopted similar mechanisms and showed strong vitality in markets such as Vietnam and Thailand, fully demonstrating that this model is highly compatible with Asian culture.

European and American markets: fertile ground or barren land for social fission?

As the overseas version of Pinduoduo, Temu cleverly transformed the social fission model when entering the US market. The "Referral Bonus" plan it launched has simple rules but significant effects: users can get a $20 cash reward by inviting 5 new users to register through platforms such as WhatsApp, Twitter, and Facebook. The more invitations, the higher the reward. Although this mechanism cannot completely replicate Pinduoduo's "cut one knife" model due to local legal restrictions, it still successfully triggered viral spread.

The data confirms the effectiveness of this strategy: in the first month of 2023, Temu topped the iOS free download list in the US for 28 consecutive days. At the end of 2023, its monthly active users (MAU) were second only to Amazon, and it achieved a GMV of approximately US$16 billion in one year, surpassing SHEIN, which has been in the market for a longer time.

It is worth noting that even for successful cases like Temu, its social fission strategy has undergone multiple adjustments. From the initial $20 reward for five invitations to the later adjustment to seven invitations to get the same reward, this flexible strategy adjustment shows continuous observation and response to market reactions. This iterative optimization method provides an important practical reference for Web3 projects.

But this may be one of the few successful cases of social fission in Europe and the United States so far. Several failed cases in the past decade are worth pondering. Facebook once launched the "Refer-a-Friend" program, but eventually had to adjust its strategy because users disliked this "spam-like" invitation. The case of Groupon is more cautionary. This former group buying giant had a market value of $16 billion at the time of its IPO in 2011, but its over-reliance on high discounts and social pressure eventually led to user loss, and its market value was only about $320 million as of November 2024. This cliff-like decline highlights the fragility of social marketing models that rely solely on discounts in the European and American markets. Snapchat's referral program has also encountered bottlenecks. Although the platform is extremely popular among young users, its social fission program has not been effective due to users' concerns about privacy and fatigue from continuous marketing information.

These cases reveal the particularity of the European and American markets: users have a strong sense of privacy and are highly vigilant against commercial promotions. Their tradition of individualism makes them unwilling to be labeled as “marketers.” More importantly, these markets are less tolerant of marketing methods, and users are more inclined to make decisions based on personal judgment rather than social pressure.

However, recent data shows that the European and American markets are not completely opposed to social fission. Taking Telegram as an example, the number of users has exceeded 950 million, of which more than 10 million are paying users, a large part of which are from Europe and Russia. In 2024, Web3 projects have become a clear trend in acquiring customers in the Telegram ecosystem. This shows that European and American users are also willing to accept innovative social forms.

There are indeed huge opportunities in the European and American markets. First of all, there is the user base advantage. The huge number of active social media users provides ample room for growth for the project. These users have a high degree of digital acceptance and are accustomed to switching between multiple platforms freely, providing a good communication channel for social fission.

What is more noteworthy is that the competition between Web3 projects in the European and American markets is relatively low, and there is still room for optimization of user acquisition costs. The market is highly receptive to innovative marketing models, which provides a rare opportunity window for redefining social fission.

Dilemma: Why is traditional social fission difficult to replicate?

At the cultural level, European and American societies have deep-rootedIndividualistic traditionIn stark contrast to the collectivism of Asia, European and American users generally have a strong sense of personal boundaries, are naturally wary of marketing information, and attach great importance to personal privacy protection. This cultural characteristic makes traditional social fission methods often difficult to work.

Social pressure is particularly evident in the European and American markets.Users are generally worried that commercial promotion activities will affect real social relationships and are unwilling to be labeled as "marketers." This psychological burden seriously restricts the natural spread of social fission.

The establishment of a trust mechanism faces greater challenges in the European and American markets.cryptocurrencyThe trust in related projects in these regions is generally low, and users are cautious about emerging technologies. Building trust requires a longer process and more effort. At the same time, European and American users have higher requirements for marketing methods. Direct interest inducement often has poor results and requires more sophisticated value delivery methods.

Breakthrough: Redefining social fission in the European and American markets

To achieve a breakthrough in the European and American markets, the first task is to achieve strategic transformation.The traditional "pressure marketing" model needs to be transformed into a "value sharing" model.This means that when designing growth strategies, we should emphasize personal benefits rather than community pressure, emphasize the user's right to choose independently, and focus on building positive sharing motivations. When users feel the real value and can decide whether to share independently, the communication effect is often better.

Gamification design also requires localization.In view of the psychological characteristics of European and American users, the interactive mechanism should pay more attention to personal experience, reduce obvious marketing traces, and provide users with personalized ways of participation. This transformation should not only consider the functional level, but also go deep into the user's psychological level. The new growth paradigm should explore the optimal user incentive mechanism within the boundaries allowed by the rules and find a balance point that can effectively fission without disgusting users.

For Web3 projects, social fission has another unique advantage:Through intelligencecontractThe automated reward distribution mechanism implemented can ensure the fairness and transparency of the entire process.This not only reduces users' concerns about marketing activities, but alsoBlockchainThe inherent verifiability of technology builds trust. For example, a project can put the invitation record and reward distribution process on the chain, so that every participant can verify the fairness of the event.

When implementing it, we need to pay attention to the following key points:

• transparency:Clearly display the rules and reward mechanisms to build trust.

• Autonomy:Give users sufficient choices and avoid coercion.

• Value Orientation:Highlight personal benefits rather than social pressure. The "benefits" in the Web3 field can be set as Waitlist whitelist qualifications, points,Token, or NFT, etc.

• Privacy protection:Strictly abide by local regulations and respect user privacy preferences. Social fission activities in the Web3 field can make good use ofBlockchainTechnology, for participantswalletKeep sensitive information such as addresses private.

At the tool level, technological innovation will play a key role.The emergence of no-code tools has greatly lowered the threshold for use, allowing operations teams to quickly adjust strategies. Powerful data analysis capabilities provide more opportunities for decision optimization.

The project provides support to help it grasp user needs more accurately. At the same time, native product integration, simplified participation process and transparent reward mechanism will become important factors in improving user experience.

in addition,In addition to social fission, other marketing methods can also be used in combination to achieve a multi-pronged approach.Temu’s success is not based on social fission alone.Xiaobai NavigationAt the same time, it invested heavily in social media and traditional advertising (such as the Super Bowl). In total, each American user has been exposed to Temu ads 60-70 times on various platforms. Most Web3 projects may not have the huge advertising costs of Temu, but they can combine industry characteristics, use KOL or Influencer's social media content dissemination, and combine social fission to achieve better results.

The future: A new paradigm for social growth in Web3 projects

With the global development of Web3 projects, how to achieve effective user growth in different cultural backgrounds will become a key issue. In the European and American markets, social fission is not impossible to achieve, but requires deeper localization transformation and innovation. Especially in the field of Web3, with the development of a new generation of social protocols and decentralized identity solutions, social fission may usher in new opportunities. These technological innovations can not only better protect user privacy, but also provide more diversified value delivery methods for social fission. Project parties need to continue to pay attention to these technological developments and incorporate them into the design of growth strategies.

Through the right tools and strategies, combined with a deep understanding of local user psychology, Web3 projects can find a new paradigm for social growth suitable for the European and American markets. In this process, flexibility, transparency and user experience will become key factors for success.

In this global Web3 growth competition, the real winners are not the imitators who simply copy successful experiences, but the pioneers who can adapt to local conditions and make innovative breakthroughs. Only by truly understanding and respecting market differences can we seize the initiative in the wave of globalization.

The article comes from the Internet:The Dilemma and Breakthrough of Pinduoduo-style Social Fission in the European and American Markets: New Thinking on Web3 Growth

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